By: Motonao Uesugi
TOKYO -- Turkey's currency crisis is adding to the financial troubles of emerging Asian economies that have taken big loans for infrastructure projects under China's Belt and Road initiative.
The plummeting lira is forcing Asian nations to consider rate hikes to shore up their currencies (Indonesia tightened policy this week). Failure to get back on an even keel could add to heavy debt-servicing costs that undermine financial stability.
Loans from China help emerging economies pay for the infrastructure improvements they need to foster economic growth, but heavy debt-servicing costs threaten to undermine their financial stability.
The Center for Global Development, a U.S. think tank, says Laos, the Maldives, Mongolia, Pakistan and four other countries taking part in the Belt and Road initiative are already at risk.
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