The Federal Reserve Bank of New York works to promote sound and well-functioning financial systems and markets through its provision of industry and payment services, advancement of infrastructure reform in key markets and training and educational support to international institutions.
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The Impact of Exchange Rate Movements on U.S. Foreign Debt
January 2003 Volume 9, Number 1
JEL classification: F31, F36, F32
Author: Cédric Tille
In 2001, the United States' net debt to the rest of the world jumped to $2.3 trillion, a level double that recorded in 1999. Much of the increase reflects the new borrowing undertaken by the country to finance its mounting current account deficit. A third of the change, however, can be traced to a simple accounting effectthe impact of a rising dollar on the value of U.S. assets held abroad.