However, recent developments in international capital markets challenge the inevitability of “original sin” (Eichengreen, Hausman, and Panizza, 2003; Burger and Warnock, 2004). First, some small countries have in fact been able to sell domestic-currency debt to foreigners (examples include New Zealand, Poland, and South Africa).
Second, some developing countries have been able to establish active domestic credit markets in which borrowing may take place in long-term, fixed-rate debt, providing a partial substitute for foreigncurrency borrowing (examples include Chile, India, and Korea).