A marked increase in foreign exchange derivative trading, especially in dollar-euro, according to the Bank for International Settlements, is consistent with increased hedging of exports to the United States and to other markets that use currencies tied to the U.S. dollar.2 However, most contracts are short-term because long-term hedging is expensive.
The IMF has estimated that government debt in G-20 countries will reach 118 per cent of GDP in 2014, and that lowering it to 60 per cent by 2030 would require an improvement in structural primary balances by 8 percentage points of GDP (Figures 4 and 5). 5 Achieving shifts of these proportions will involve tough policy choices.