US$ rise hits emerging market borrowers

London

THE surge of the US dollar is squeezing emerging-market and other sovereign and corporate borrowers.

So much so that interest and repayments of foreign debt are underpinning the US currency, especially against Asian and other emerging- market currencies.

When China, Brazil, India, Indonesia and other Asia sovereign and corporate borrowers accelerated foreign borrowing from 2009, they were attracted by the relatively low interest rates and dollar weakness. But by borrowing the greenback they were effectively selling the US currency short.

As the US dollar has been in an upward path for some time and the economic boom is over, companies and other borrowers h…