The important thing to keep in mind is the GOI is bankrupt and cannot pay it’s bills.
The term being used is “liquidity issue” and “financial crisis”…
But by all definitions, when you cannot pay your creditors, make your payroll, and your income is way less then your expenses, YOUR BANKRUPT…
Now you have assets but in the real world you enter Bankruptcy Chapters for protection…
The CBI has 59 billion in reserves and the plan was described to cover the GOI expenses for 6 months with loans through purchasing government bonds…
The GOOD in all this is the pressure is also on the CBI…
Central Banks do not relish the thought of their reserves being depleted…
And even though the GOI has a plan to open the market economy, this is no where near a quick fix that in 6 months it is flourishing…the infrastructure isn’t there!
Abadi is on the right path and has the support of the higher heads that matter…
And that may just be enough for the CBI and IMF.
BGG Blog
