Why interest rate in developing is higher than developed countries?

There are several reasons for this but probably the main one is that developing countries are starting from a lower base income level than their developed country counterparts. Then there is also the presence of transfers (ODA etc) from developed to developing countries; higher population growth rates in developing countries; and the general shift of labour from agriculture to faster growing service and industrial industries that's taking place in developing countries. FDI is also growing faster into developing countries than into developed economies. General trade liberalisation is also helping developing countries even though there remain many barriers still in place.

David Michael

www.wondu.com