US President Joe Biden downplayed the impact of the strong US dollar on the global economy and said he was “not concerned” about the strength of the American currency. Biden blamed weak growth and policy mistakes in other parts of the world for dragging down the global economy. “The problem is the lack of economic growth and sound policy in other countries, not so much ours,” he explained. He said the US strong-dollar policy had nothing to do with it and added that the US “economy is strong as hell.” However, not everybody shares this view. On October 11, IMF chief economist Pierre-Olivier Gourinchas pointed out that most Western countries were struggling with economic challenges due to the rising greenback. A stronger dollar increases the cost of imports denominated in USD. This in turn fuels inflation and causes the tightening of financial conditions in many countries. As a result, servicing the national debt is getting more costly. Earlier, the US Federal Reserve embarked on the path of monetary tightening. Such a policy inevitably leads to more expensive commodities as they are denominated in US dollars. Notably, commodity prices are rising everywhere except for the US. This increases the risk of bankruptcy among large companies.
