The International Monetary Fund’s managing director warned that a prolonged closure of the Strait of Hormuz is worsening the global debt situation, threatening to hit developing and low-income countries the hardest. She noted that heavy debt issuance from advanced economies is competing for scarce capital, raising bond yields and risking the financial progress of poorer nations.
This blockade has increased energy costs and disrupted shipping routes, combining with weaker currencies, falling stock markets, and rising borrowing costs to create systemic risks. To manage the strain, she suggested empowering multilateral development banks to offer emergency financing and proposed that bilateral creditors might need to suspend debt service payments for the most exposed nations.