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To: FJB who wrote (5789)	6/10/1998 6:55:00 PM
From: Jess Beltz	Read Replies (1) \| Respond to of 10921

Hello Robert. Good question. Actually, I can only say for certain that HK banks require repayment in US dollar equivalents. It would, however make sense for the Japanese banks to do so as well because (1) the US dollar is currently about the strongest currency in the world, and (2) the yen has been giving up ground for over a year. In truth, however, I don't know for sure what currency Japanese banks require repayment in. I will ask my Japanese friend today and see what he says. In fact, this is a very important point. jess.

To: FJB who wrote (5789)	6/10/1998 7:45:00 PM
From: Tiger	Read Replies (1) \| Respond to of 10921

The reason that most loans are in $s relates to two issues: 1) The SEA countries' currencies were linked to the US$. Lenders wouldn't want to take the direct SEA currency risk, but were comforted in the belief that a stable exchange rate would allow the borrowers to repay. (In the end, if the borrowers default because of an adverse shift, the banks will effectively have taken the currency hit anyway.) 2) Yen-denominated loans were not typical as the primary end markets (US or other SEA countries) for the borrowers' products was also US$-linked. The closed Japanese markets - think about those Japanese trade surpluses - don't allow for accumulation of much yen for repayment of debt by borrowers.