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Allen & Overy’s white paper puts it among those who take a rather gloom-and-doom attitude toward the likely consequences of a recent Second Circuit decision on Argentina's default. Personally, I don't agree that the sky is falling on the sovereign debt market.
One of the Africa-oriented hedge funds showcased, Altree, expects that as the African market matures short opportunities will become available. Another, Nubuke Africa Multi-Strategy, makes a point of limiting its exposure to South Africa and Egypt (presumably the two most tempting countries of concentration) to no more than half its portfoilio, to ensure that its investments will remain pan-African.
As Guillermo Calvo noted in 1991, one of the problems with sterilization is simply that the larger amount of government debt itself induces higher inflationary expectations "because sticking to a stable price level ... would make servicing the public debt excessively costly from a social and political point of view."
