(Bloomberg) -- Treasury Secretary Janet Yellen said the US and other leading economies must be cognizant of “spillovers” stemming from their responses to economic challenges.

“Our policies do have spillovers and, of course, many countries are concerned with the spillovers from US policy on their exchange rates with the dollar being so strong,” Yellen told reporters Sunday in Bali, Indonesia, where world leaders are gathering this week for the Group of 20 summit.

The Federal Reserve has lifted interest rates by almost 4 percentage points this year in an aggressive effort to tackle inflation. That has caused headaches for many countries, however, as dollar-priced commodities have become more expensive and dollar-denominated debt is now harder to pay back. 

“We’re very worried about debt” among low-income countries, she said.

The Treasury chief said the woes currently dogging economies around the world were “very unusual” in that they varied widely by country. She contrasted that with the situation following the financial crisis of 2008-09.

“After the global financial crisis, countries could band together and say, ‘we need fiscal stimulus,’” she said. “But now countries have different amounts of fiscal space, different inflationary pressures.”

G-20 Struggles

Yellen has consistently signaled her support of the Fed’s moves to bring down the worst bout with inflation in 40 years. Yet the remarks signal an awareness that US policy has consequences around the world.

Yellen also spoke of 2022 as a challenging year in the G-20, a forum meant to foster collaboration among the world’s largest economies. The US has pushed for the group to condemn Russia over its invasion of Ukraine. With Russia and some other G-20 members resisting, that has prevented the group from issuing joint communiques following several high-level meetings.

She hailed, however, Saturday’s G-20 announcement on the establishment of a fund to support pandemic preparedness.

“It’s been a difficult year for the G-20, especially Russia’s invasion of Ukraine and tensions with China,” she said. “The fact that we were able to collaborate and establish a brand new multilateral initiative, I think is noteworthy.”

(Updates with additional Yellen comments from fourth paragraph.)

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