Latin America Feels the Squeeze

Rising U.S. interest rates generate jitters not just from Maine to California; they also rattle nerves in Latin America from Mexico to Argentina. Every time rates jump, so do the interest costs on the region's $335 billion foreign debt, of which about 27% is owed to U.S. banks. For each percentage point rise in the U.S. prime and other international lending rates, the annual interest on Brazil's $96 billion debt increases by about $750 million, and the payments on Argentina's $43 billion obligation go up by some $300 million. Latin America's economies are already severely depressed, and they will not be...

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