WASHINGTON: The prolonged closure of the Strait of Hormuz is pushing up borrowing costs and could undermine progress made in tackling debt problems in developing countries, International Monetary Fund chief Kristalina Georgieva said on Thursday.
Georgieva said inflationary pressures linked to the continued disruption of the strategic waterway were among the factors pushing bond yields higher. Rising debt levels were also contributing to higher borrowing costs, she said.
“This is not just a low-income developing countries problem,” Georgieva told Reuters on the sidelines of a G20 meeting in the US state of North Carolina.
“High debt levels in advanced economies, combined with stubborn inflation, could lead to debt service costs going up for everybody, including for the low-income, for the emerging markets, and developing economies.”
Her comments came as the prolonged disruption to shipping through Hormuz added to financial pressures facing governments around the world.
Higher borrowing costs add to debt pressure
Higher interest rates and borrowing costs can increase the amount governments must spend servicing existing debt, making it more difficult for countries already facing financial constraints to manage their obligations.
Georgieva linked the risks to the combination of elevated government debt and persistent inflation. She warned that those pressures could raise debt-service costs across advanced and developing economies.
Developing countries have faced debt challenges in recent years as higher global interest rates have increased the cost of external borrowing and refinancing.
The IMF has previously warned that elevated debt-servicing costs can constrain government spending and complicate efforts to restore fiscal stability.
Trump claims Hormuz oil flows restored
Meanwhile, US President Donald Trump said on Thursday that oil transit through the Strait of Hormuz had returned towards normal levels.
In a post on Truth Social, Trump wrote: “Hormuz oil volumes are back!”
He said at least 20 million barrels per day of oil had been transported through the waterway before the war and claimed that flows had now returned to 18 million barrels per day.
— Rapid Response 47 (@RapidResponse47) September 3, 2026
Trump did not provide details or supporting data for the figures.
The Strait of Hormuz is a critical route for global energy supplies. Disruptions to shipping through the waterway are affecting crude oil prices.
Iran has continued to insist that the Strait of Hormuz cannot be reopened without Tehran’s agreement.
Ebrahim Azizi, head of Iran’s parliamentary National Security and Foreign Policy Commission, said the waterway would not be opened without Iran’s consent, according to Press TV.
Azizi said Iran had demonstrated its ability to make its threats credible to the United States, the state broadcaster reported.
Iran's parliamentary National Security and Foreign Policy Commission head Ebrahim Azizi declared that the Strait of Hormuz will not be opened without Iran's consent, emphasizing that Iran has proven its ability to make its threats credible to the United States. pic.twitter.com/UcfGjc08mE
— Press TV 🔻 (@PressTV) September 3, 2026
Oil prices rise as tensions persist
Oil prices rose on Thursday as US strikes on Iran and renewed Israeli threats against Tehran revived concerns about possible disruptions to Middle East energy supplies.
Brent crude futures were up 59 cents, or 0.62%, at $96.22 a barrel by 1327 GMT. US West Texas Intermediate crude futures rose 78 cents, or 0.86%, to $91.79.
The price movements came despite Trump’s claim that oil flows through Hormuz were recovering.
