Back
26 Jan 2015
Greeces external position - SG
FXStreet (Guatemala) - Sebastien Galy, analyst at Societe Generale explained that one scenario is the usual last minute deal for Greece.
Key Quotes:
"Fair value of the drachma - Should Greece leave the eurozone in a well-controlled fashion, a new Drachma (GRD) could fall at least 11% in real terms based on a Natrex model. This drop will depend crucially on the considerable amount of debt that would have to be forgiven/restructured and the credibility of the authorities."
"Note that a virtual GRD is cheap cyclically and structurally had Greece not had a debt sustainability problem. Note also that balance of payment style models are not very reliable as it is difficult to find a period of stability in Greece's external position."
Key Quotes:
"Fair value of the drachma - Should Greece leave the eurozone in a well-controlled fashion, a new Drachma (GRD) could fall at least 11% in real terms based on a Natrex model. This drop will depend crucially on the considerable amount of debt that would have to be forgiven/restructured and the credibility of the authorities."
"Note that a virtual GRD is cheap cyclically and structurally had Greece not had a debt sustainability problem. Note also that balance of payment style models are not very reliable as it is difficult to find a period of stability in Greece's external position."