Moody's: Which emerging markets are most vulnerable to sharp rise in US interest rates?

Latin America and Caribbean at risk

Emerging markets with short average debt maturity and weak debt affordability are the most exposed to a sharp rise in US interest rates, according to Moody's Investors Service.

Despite predicting rates to rise at a gradual pace, Moody's warned rates could still tighten faster than currently expected. In the US, Federal Reserve chairman Jerome Powell has already hiked rates once this year in March, with plans to raise them two or three times more by the end of 2018. In a study of 125 rated sovereigns, the ratings agency analysed the sensitivity of fiscal metrics against a severe interest rate shock over four years. It found Latin America, the Caribbean and Sub-Saharan Africa were the most exposed regions to a rates shock as a result of weaker debt affordab...