How does a loan indexed against a basket of currencies work?
Paul McBride asked:
A couple of year s ago. I took out an auto loan and the lender in the country I am living in indexed the loadn against a basket of currencies. Everything seemed to be going fine until recently when the currency of the country I am living in started to depreciate against other currencies. I notice that my new principal took a hit in the upward direct by approximately the same percentage as the decline in the local currency so I now owe more than I did a year ago. If my currency here recovers to previous levels will the principal also go down?
Cody
A couple of year s ago. I took out an auto loan and the lender in the country I am living in indexed the loadn against a basket of currencies. Everything seemed to be going fine until recently when the currency of the country I am living in started to depreciate against other currencies. I notice that my new principal took a hit in the upward direct by approximately the same percentage as the decline in the local currency so I now owe more than I did a year ago. If my currency here recovers to previous levels will the principal also go down?
Cody
Tags: Auto Loan, Currencies, Decline
March 20th, 2009 at 6:06 pm
Glenda
Hello Every body,
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March 23rd, 2009 at 2:37 pm
Erica
Hi,
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