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Rate Hikes: Debt and Currency Crises?

Rate Hikes: Debt and Currency Crises?

The Fed had already taken the path to increase interest rates after a huge expansionary monetary policy to fight covid-related impacts on economic growth. One can’t underestimate the importance of such a decision in affecting global cash flows and debt flexibility of emerging countries, especially those with dollar-dominated debts, and global recovery from covid. Besides, ongoing talks signal a more aggressive tightening policy for the Fed, with an estimated increase of interest rates to 2.2% at the beginning of the following year.