U.S. debt default to have "nasty consequences" for global economy: IMF chief

10:50, July 11, 2011      

Email | Print | Subscribe | Comments | Forum 


IMF director Christine Lagarde holds a news briefing at the International Monetary Fund headquarters in Washington July 6, 2011. (Xinhua/Reuters File Photo)

New chief of the International Monetary Fund (IMF) Christine Lagarde said Sunday that there would be "real nasty consequences" for global economy if the United States defaulted on its financial obligations.

Lagarde, who took the post of the IMF managing director on July 5, said in an interview with the U.S. media that the default would cause interest rate hikes and stock market falls across the world.

Her comments came at a moment when the White House and Republicans are intensively involved in deficit reduction and debt limit talks.

The U.S. borrowing limit, currently at 14.29 trillion U.S. dollars by Aug. 2, was reached on May 16.

The U.S. Treasury Department said the United States would begin to default if there was not an agreement to lift the limit before the Aug. 2 deadline.

"If you draw out the entire scenario of default, yes, of course, you have all of that -- interest hikes, stock markets taking a huge hit and real nasty consequences, not just for the United States, but for the entire global economy, because the U.S. is such a big player and matters so much for other countries," said Lagarde, former French finance minister and the first female head of the 187-member international financial institution.

On July 6, Lagarde said sovereign debt challenges were threatening a broad range of advanced economies, not only many European countries, but Japan and the United States.

Source:Xinhua
 
 
     
 
 
 
     
 
 
 
  Weekly review  
 
 
 
     
 
 

(Editor:陈乐乐)

  • Do you have anything to say?

双语词典
dictionary

  
Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • China, DPRK vow to boost cooperation, ties
  • 24th annual Squamish Nation Pow Wow
  • Rebels fight pro-Gaddafi troops in Al Dafneya, Libya
  • Sweden meets Australia at FIFA Women's World Cup
  • Senior CPC official arrives in Serbia for official visit
  • Transformer exhibition launched in Hunan, C China
Hot Forum Discussion