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Intermediate

Practice Drills: Comparing Sovereign Debt Risk Across Two Countries

A hands-on drill course for investors and finance professionals who need macro context they can defend. India carries roughly twice Indonesia's debt-to-GDP ratio, yet the rating agencies place the two within a notch of each other. Working out why is the whole skill. You take one fixed pair, India and Indonesia, and compare them drill by drill: build a clean side-by-side data sheet from IMF, RBI and Finance Ministry sources, normalise fiscal years and government definitions, then compare debt ratios, deficits, interest burdens and the debt dynamics equation. You examine who holds each country's debt, its currency and maturity mix, current accounts and forex reserves, then read 10-year yields, real yields, ratings and CDS spreads. Finally you stress both countries under growth, rate and currency shocks, calibrate your framework against Sri Lanka's 2022 default, build a weighted scorecard and write the two-country risk note. Every drill uses real Indian data sources and INR figures.

Sovereign RiskCountry RiskDebt-to-GDPDebt DynamicsFiscal DeficitForex ReservesSovereign RatingsCDS SpreadsStress TestingIndia vs Indonesia

MODULES

5

DURATION

~3.3 hrs

TRACK

Macro & Markets

What You'll Master

Pick a fair comparison pair and build a side-by-side sovereign data sheet from primary sources

Normalise fiscal years, general vs central government figures and currencies before comparing anything

Compare debt ratios, deficits, primary balances and interest-to-revenue burdens and say which matters more

Run the debt dynamics equation for two countries and read what r minus g implies for each

Assess debt holders, currency composition, maturity profile and external buffers as rollover risk

Read 10-year yields, real yields, ratings and CDS spreads as complementary market signals

Stress both countries under growth, rate and currency shocks and calibrate against Sri Lanka's default

Build a weighted sovereign risk scorecard and write a defensible two-country risk note

Access Level

LEARNER

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Everything included

Full Text Playbooks

Actionable Exercises

Mobile Reading Mode

Lifetime Updates

Curriculum Breakdown

Chapter 1: Setting Up the Comparison

3 Lessons

Drill: Choosing a Fair Pair: Why India and Indonesia Make a Useful Comparison11 min read

Drill: Building the Side-by-Side Data Sheet From IMF, RBI and Finance Ministry Sources12 min read

Drill: Normalising the Numbers: Fiscal Years, General vs Central Government, and Currency12 min read

Chapter 2: Fiscal Arithmetic

3 Lessons

Drill: Comparing Debt-to-GDP and Why the Higher Ratio Is Not the Whole Story12 min read

Drill: Comparing Fiscal Deficits, Primary Balances and Interest-to-Revenue Ratios13 min read

Drill: Running the Debt Dynamics Equation for Both Countries14 min read

Chapter 3: Debt Composition and the External Position

3 Lessons

Drill: Who Holds the Debt: Domestic Banks, Foreign Investors and the Central Bank12 min read

Drill: Currency Composition and Maturity Profile: Rollover Risk Side by Side13 min read

Drill: Comparing Current Accounts, Forex Reserves and Import Cover12 min read

Chapter 4: Reading Market and Rating Signals

3 Lessons

Drill: Comparing 10-Year Yields and Real Yields in INR and IDR12 min read

Drill: Reading Sovereign Ratings Side by Side: Moody's, S&P and Fitch12 min read

Drill: Comparing CDS Spreads and Market-Implied Default Probabilities13 min read

Chapter 5: Stress, Calibration and the Verdict

4 Lessons

Drill: Stress-Testing Both Countries Under Growth, Rate and Currency Shocks14 min read

Drill: Calibrating the Framework Against a Real Default: Sri Lanka Through the Same Lens13 min read

Drill: Building a Weighted Sovereign Risk Scorecard13 min read

Drill: Writing the Two-Country Sovereign Risk Note12 min read