---------------------- Forwarded by Vince J Kaminski/HOU/ECT on 09/15/2000 
04:37 PM ---------------------------


Maureen Raymond
09/14/2000 04:54 PM
To: Jim Cole/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Jirayut 
Rungsrithong/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, James A 
Hughes/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Vince J Kaminski/HOU/ECT@ECT
cc:  
Subject: Re: Enron's Country Curves  

Jim,

In response to the 3 questions below:

Who prepares Enron's country curves? - The Foreign Exchange and Country Risk 
group within Enron North America's Research Group is responsible for 
producing the forecasts of inflation and foreign exchange.

What is the criteria in determining the curves? Please explain. - The FX and 
Country Risk team analyses a host of data and information to forecast foreign 
exchange curves and predict inflation.   Primarily, we depend on the work of 
the Institute of International Finance (IIF), we also talk with their staff 
Senior Ph.D. Economists.  We review the current macroeconomic policy mix 
including monetary, fiscal and exchange rate policies and their 
sustainability.   We also analyze the balance of payments to make sure their 
are no pressures on the current account, capital account  or foreign exchange 
reserves.   In addition, we look at economic output in light of all the above 
mentioned factors and incorporate our global outlook of global growth and 
international commodity prices.  Then we determine our expectations for 
changes to these conditions based on many domestic and international 
factors.  We also evaluate the progress of  IMF program and the countries 
ability and willingness to meet the IMF criteria, and whether or not they are 
in compliance with the Fund.    In addition, we analyze the political 
risk/stability of the country, timing of elections and or major 
constitutional or policy changes which would have a major impact on the 
economy.  We also perform a ratio analysis of a country's ability to repay 
its debt in the context of debt-to-GDP ratios, debt service, import coverage, 
FDI-to-current account, etc.   We analyze the stability of the country's 
banking system, level non-performing loans-to-total, bankruptcy laws, and 
progress on restructuring bad debts.   All these factors influence the 
outlook on local price changes and movement of the exchange rate.

How often do the curves get updated? - Curves are updated upon request from 
the Enron business units or RAC.  The business units need to have the curves 
updated before Risk Assessment and Control evaluates the projects.


Maureen Raymond-Castaneda





Jim Cole@ENRON_DEVELOPMENT
09/13/2000 12:14 PM
To: Maureen Raymond@ECT
cc:  
Subject: Enron's Country Curves

Maureen,
Could you please answer the three brief questions below ASAP?

Thanks,
Jim
---------------------- Forwarded by Jim Cole/ENRON_DEVELOPMENT on 09/13/2000 
12:18 PM ---------------------------


Ramon Rodriguez
09/13/2000 12:16 PM
To: Jim Cole/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc: Lian Ji/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT 

Subject: Enron's Country Curves

Jim,

Please call Maureen or your contact TONIGHT to get the appropriate response.

R


---------------------- Forwarded by Ramon Rodriguez/ENRON_DEVELOPMENT on 
09/13/2000 11:36 AM ---------------------------


Jirayut Rungsrithong
09/13/2000 04:15 AM
To: Ramon Rodriguez/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:  
Subject: Enron's Country Curves

Ramon:

We received questions from the lenders re: Enron's country curves:

Who prepares Enron's country curves?
What is the criteria in determining the curves? Please explain.
How often do the curves get updated?

Could you please answer these questions?

Regards,
Jay