United States Secretary of the Treasury Janet Yellen warned on Friday that Washington could spur a global financial crisis and undermine the role of the dollar if it fails to pay its debts.
The US government hit its $31.4 trillion borrowing limit on Thursday, a figure that reflects money already spent by the government.
Yellen has informed congressional leaders that her department had begun using extraordinary cash management measures to stave off default until early June, Reuters reported.
Yellen said in an interview with CNN that a potential US default could damage the global economy.
“It could cause a global financial crisis. It would certainly undermine the role of the dollar as a reserve currency that is used in transactions all over the world,” she said, adding that in such a scenario many people would lose their jobs and see their borrowing costs rise.
White House officials have previously said they will not negotiate over raising the debt ceiling with the far-right Republicans, and administration officials are betting that Republicans will eventually buckle under pressure.
