Very High Interest Rates

SWOT Threat: Very High Interest Rates
High interest rates can debilitate an economies ability to invest. High rates draw money into savings accounts, because savings accounts offer better returns and less risk than investing in riskier assets. Interest rates are meant to drive down inflation, but high government spending would have to drop in order for inflation to slow down to a reasonable level. High interest rates also increase the value of currencies. For emerging countries that focus on exports, a high rate slows down export demand.