A United States default on its financial obligation due to a failure to raise its debt ceiling by Tuesday, can trigger serious financial problems for Barbados.
And they can range from a steep drop in the value of Barbados’ foreign reserves and a decline in tourists, to a slowdown in the flow of foreign direct investment.
That warning came from Winston Cox, a former Governor of Barbados’ Central Bank who later became the Caribbean’s executive director at the Inter-American Development Bank (IDB) in Washington.
“If the US were to default on its debt, for instance, that means the value of our [Barbados’] foreign reserves held in US dollars would be zero, really,” said Cox. “They would not be liquid and we would not be able to use them to meet the transactions that are normally met by drawing down
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