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Currencies

Superstrong dollar threatens debt crisis across emerging economies

Mexico pressured to follow Fed hikes, while Sri Lanka's repayment costs soar

The dollar's nominal effective exchange rate against a broad basket of currencies, including from both advanced and emerging economies, is now at one of its highest points since it started publicizing the data in 1994.    © Reuters

TOKYO -- The dollar is approaching heights not seen since 1985 as the Federal Reserve raises interest rates to combat historic inflation, squeezing emerging economies that face soaring costs to service their dollar-denominated debts.

Market players do not believe the Bank of Mexico can separate its monetary policy from that of the U.S. Federal Reserve, Bank of Mexico Deputy Gov. Galia Borja Gomez said in an interview published in late August.

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