Relief as US Congress approves debt deal with hours to deadline

Economies all over the world have welcomed the move by the US Congress to pass a bill to reopen the government and raise the federal debt limit, with hours to spare before the nation risked default. Rwanda welcomed the deal, with John Rwangobwa, the governor of National Bank of Rwanda, saying any body across the world should be positive at this stage.“The shut down and possible default by the US was negatively affecting the markets and global economy in general,” Rwangobwa said. Joy Ntare, the director in charge of financial stability at National Bank of Rwanda, hailed the move, calling it yet another chance for economies to stabilise. Ntare said failing to reach a deal would have meant fluctuations among the major currencies that drive the economy, which would have spelt disaster for world economies. “We are waiting to see how the events will unfold, but so far it is great news for all the economies around the world, averting financial instabilities means economic growth,” Ntare said.China also welcomed the deal, and the head of the International Monetary Fund described it as important and necessary. The Democrat-controlled Senate passed the measure by 81 votes to 18 and the Republican-controlled House of Representatives by 285 votes to 144.Despite reluctant support from the House Republican leadership, most of the party’s lawmakers voted against it. It came hours before the deadline to raise the $16.7 trillion limit.The Bill yanked the US back from the brink of a budgetary abyss by extending the Treasury’s borrowing authority until February 7.It also funds Washington until January 15, reopening closed federal agencies after 16 days of partial government shutdown and bringing thousands of employees back to work.President Barack Obama signed the Bill into law early yesterday.Following the deal, shares in Tokyo closed higher, while in Europe they fell slightly in early trading. Early this week experts had warned that a lot of investments and projects, especially those funded by donors could be crippled with developing economies being the hardest hit if a deal was not reached.The president of the World Bank, Jim Yong Kim, also expressed his concern over the situation.He warned that the US was just “days away from a very dangerous moment” because of the government’s borrowing crisis.The deal, however, offers only a temporary solution and does not resolve the budgetary issues that fiercely divide Republicans and Democrats.