In this file photo taken on May 7, 2021 US Treasury Secretary Janet Yellen speaks during the daily press briefing, in the Brady Briefing Room of the White House in Washington, DC. Global equities marked time while the dollar dipped June 7, 2021 after US Treasury Secretary Janet Yellen downplayed fears over the prospect of higher interest rates triggered by a spike in inflation.

Yellen says 'concerned' debt relief could aid Chinese lenders

(Agence France-Presse) - June 11, 2021 - 9:53am

WASHINGTON, United States — US Treasury Secretary Janet Yellen said Tuesday she was concerned that Chinese lenders could benefit from an international debt relief initiative aimed at poor countries.

In April, G20 countries including the United States agreed to extend until December a moratorium on debt interest payments for the poorest nations, amid fears they will lag behind in the global recovery from the coronavirus pandemic.

Chinese financial institutions are among the top lenders to lower-income countries, and Yellen told a House Appropriations subcommittee that she aims to ensure the relief -- meant to help poor countries spend to revitalize their economies after the pandemic -- doesn't end up in China's hands.

"We have spoken with China about their participation. They have promised to participate as equal partners in these debt frameworks," she told lawmakers.

"We would be very concerned to see the resources that are provided to these countries used to repay Chinese debt. That would defeat the purpose of the programs."

In prepared remarks before the committee, Yellen also encouraged the US Congress to allocate money to the debt relief measure, which is being implemented by the IMF and World Bank.

Of the 73 countries eligible for debt relief, 47 have asked to participate in the program, and are expected to save $7.3 billion in debt payments between the start of the year and June 30, according to the World Bank. 

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