This paper explores the issue of debt forgiveness in the case of Mexico during the periods 1971-75 and 1983-86. An attempt is made to contrast the real costs of foreign borrowing over periods during which the degree of currency substitution implied by the differing economic regimes should have changed substantially. The analysis employs a statistical specification of the underlying macroeconomic relationships that is model-free and has proved to provide superior out-of-sample forecasts of macroeconomic variables. Also, due to the courseness of some of the time series for debt, a special procedure for the interpolation of monthly series from quarterly series is considered.