How the US interest rate rise could affect emerging markets

The 0.25% increase in the US interest rate will reverberate across global markets, but it may not happen tomorrow, Liliana Rojas-Suarez writes for International Finance Magazine. The short-term effect won’t be significant, Rojas-Suarez predicts, because investors have long anticipated an increase, and there is no expectation of a similar rise in other advanced economies. However, developing economies have debts in US dollars, meaning that continued US increases will continually drive up their costs. At the same time, external finance may disappear as higher US rates become more attractive to investors, according to Rojas-Suarez.

Read more in International Finance Magazine >