The Deputy Prime Minister ChineseLiu He, expressed Tuesday at the forum of Davos his concern for the “side effects” for emerging and developing countries from the interest rate hikes of the main central banks.
“We ask that big governments pay more attention to the secondary effects of their rate hikes in emerging and developing countries, so as not to burden them with more debt or financial risks,” declared the leader during a speech in the World Economic Forum (WEF) held in the Swiss ski resort.
The world’s major central banks, led by the US Federal Reserve (Fed), raised their interest rates last year in an attempt to curb inflation.
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The fed raised them in December to a range of 4.25% to 4.50%, the highest level since 2007.
The consequence is the strengthening of the dollar against the currencies of emerging and developing countries, making their debt in the United States more expensive.
Rate hikes have also increased the cost of borrowing for governments around the world, reducing their ability to invest.
According to World Bank data, more than 60% of developing countries are on the verge of suffering a debt crisis or have already suffered one.
The Chinese vice premier also said on Tuesday that he was “willing to work with all parties to find solutions to the debt problems of some developing countries.”
Source: AFP
Source: Gestion
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