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US expert: The rate hike poses challenges and opportunities to developing countries

CCTV.com

12-16-2016 00:19 BJT

The rate hike by the Federal Reserve poses challenges and opportunities to developing countries. That's according to an US expert.

"Interest rate increases from the Fed I think are both good news and bad news for developing countries. The good news: it's a signal that the U.S. economy is doing better, so the U.S. will import more and that provides spillover benefits to our partners like China. On the other hand, the cost of capital is going up. China may have to raise interest rates itself to manage its currency and to deal with the financial risks that are building up in China. So I think it complicates macro-management a little bit. But mostly it's good news if the U.S. economy is performing well, because that stimulates other economies around the world."said David Dollar,senior fellow of Brookongs Institutions.

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