Rising U.S. interest rates are expected to worsen the global debt crisis, especially for developing countries, according to a research report by U.K. non-profit organization, Jubilee Debt Campaign.
More Details🧐 The Federal Open Market Committee (FOMC) is meeting today & tomorrow, & is expected to announce the first interest rate hike in three years to take place in March 2022.
Rising U.S. interest rates would make it more expensive for countries to meet their USD-denominated debt obligations.
According to the report, developing countries’ debt payments rose 120% between 2010 & 2021. The Executive Director of Jubilee Debt Campaign stressed the need for urgent action on debt relief, as well as a debt calculation strategy.
Why is this Important🤔 Every interest rate hike would put further pressure on developing countries’ debt crises, which intensified during the pandemic & never really recovered.
While most analysts expect between three to four interest rate hikes in 2022, multinational investment bank Goldman Sachs hinted at the possibility of more than four rate hikes in 2022 due to surging inflation.