LONDON—For developing countries, the Federal Reserve’s battle to squelch U.S. inflation with a series of rate increases this year stirs a mix of hope and anxiety.
Central bankers in developing countries have been ratcheting up interest rates for months, seeking to stay ahead of a rise in U.S. rates that could destabilize their economies by pushing up their own cost of debt, weakening their currencies and driving capital out of their markets and into higher-yielding U.S. securities.
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