let s take a look at why higher interest rates particularly in the us are such a problem for developing nations. well, 90% of the debt held by emerging market countries is denominated in dollars. from early last year, the us central bank has been raising interest rates aggressively, to try to combat inflation. and that s made the us dollar more attractive to investors, driving up its value against other currencies. this chart shows the value of the dollar against six other major currencies. it s at a 20 year high, with the strong dollar making repayments for those highly indebted countries punitively expensive. here s professor tobias broer from the paris school of economics. typically, this happens in times of boom in us economy. that is typically the time of a booming world economy.
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