Sailing Through the Stormy Waters: Top 7 Economic Crises Sparked by Skyrocketing Interest Rates

The Latin American Debt Crisis (1980s)

In the 1980s, Latin America experienced a severe economic crisis, largely due to a sudden increase in global interest rates. This crisis was triggered by the Federal Reserve's decision to aggressively raise interest rates to combat inflation. As a result, the cost of servicing external debt rose sharply for Latin American countries, leading to a widespread debt crisis. This crisis had profound social and economic impacts, including hyperinflation, economic contraction, and increased poverty rates.