New chief of the International Monetary Fund (IMF) Christine Lagarde said Sunday that there would be "real nasty consequences" for global economy if the United States defaulted on its financial obligations.

IMF director Christine Lagarde holds a news briefing at the International Monetary Fund headquarters in Washington July 6, 2011.  (Xinhua/Reuters File Photo)
Lagarde, who took the post of the IMF managing director on July 5, said in an interview with the U.S. media that the default would cause interest rate hikes and stock market falls across the world.

Her comments came at a moment when the White House and Republicans are intensively involved in deficit reduction and debt limit talks.

The U.S. borrowing limit, currently at 14.29 trillion U.S. dollars by Aug. 2, was reached on May 16.

The U.S. Treasury Department said the United States would begin to default if there was not an agreement to lift the limit before the Aug. 2 deadline.

"If you draw out the entire scenario of default, yes, of course, you have all of that -- interest hikes, stock markets taking a huge hit and real nasty consequences, not just for the United States, but for the entire global economy, because the U.S. is such a big player and matters so much for other countries," said Lagarde, former French finance minister and the first female head of the 187-member international financial institution.

On July 6, Lagarde said sovereign debt challenges were threatening a broad range of advanced economies, not only many European countries, but Japan and the United States.

 VietNamNet/Xinhuanet