ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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India’s Turn to Save the World from the Next Crisis

A silent wave of financial stress is running through the world financial markets. India, the incoming G20 President, must provide the leadership necessary to save the world from an emerging market debt crisis. The proximate cause of the crisis is the combination of COVID-19 debt and a jump in the US dollar. Fighting the dollar’s appreciation with higher interest rates on debt will push the world into recession. Faced with a rich-country commercial bank debt crisis in 2008, the G7 announced that they would use all the available tools and take all necessary steps to save the banks. We need to do the same today for countries. India should press the IMF to immediately increase access to its unconditional rapid fi nancing facilities and temporarily suspend interest rate surcharges. Avinash

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