The United States has external debt in dollars: This makes a huge difference

A significant share of emerging countries’ total debt is still in foreign currencies: 18% in Latin America, 16% in Asia, 32% in Europe, Africa and Turkey. When their exchange rates depreciate, the value of their debt in loca l currency therefore increases sharply, which reduces growth. The difference is very significant with the United States, whose external debt is in dollars. A fall in interest rates in the United States therefore reduces the cost of the external debt and the depreciation of the dollar that usually follows as a result does not increase the level of the external debt in US currency.