IMF chief: “Don’t say goodbye to your dollars yet”

Key facts:
  • The “strength” of the US economy gives the dollar the power to be a reserve, according to Georgieva.

  • Georgieva said she is confident the United States will avoid a debt crisis.

The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, affirmed this week that world reserves in US dollars will not change quickly to other currencies, after considering that the “strength” of the economy of that country guarantees that this currency is a “store of value”

During a panel at the Qatar Economic Forum, held this week in the capital of that country, Doha, Georgieva remembered that the de-dollarization process “has been with us for a long time”without representing an important change so far.

He said world dollar reserves used to be 70% and are now “slightly below 60%.” For her, this is “understandable”, considering that there are other currencies, such as the euro and the Australian dollar, that are taking place in the reserves.

“However, we do not expect a rapid change in reserves (in dollars). Because the reason the dollar is a reserve currency is the strength of the US economy and the depth of its capital markets. So don’t say goodbye to your dollars just yet.”

Kristalina Georgieva, Managing Director of the International Monetary Fund.

The US debt crisis is approaching and de-dollarization continues to advance

Although Georgieva extolled the ‘strength’ of the US economy, she also acknowledged that the country is about to enter into a debt default.

However, the IMF chief said she was “confident” that the US government will manage to avoid the debt crisis. This, although the Secretary of the Treasury warned in recent days that the country could default on payments.

Such non-compliance has caused the country’s banks to prepare for a possible crisis, which could begin after June 1, the deadline for the United States government to evade default, as reported by CriptoNoticias.

Meanwhile, the IMF directive did not take into account that the current de-dollarization process is more advanced compared to previous opportunities, based on the fact that entire blocks of countries They have claimed their interest in cutting their dependence on the dollar US.

As CriptoNoticias has reported, the BRCIS countries (Brazil, Russia, China, India and South Africa), agreed to move away from the green ticket for their foreign trade, preferring for this the use of national currencies. In addition, they raised the idea of ​​a new form of currency, although it is a long-term issue.

The countries of Southeast Asia they also notified their intention to reinforce the use of local currencies and reduce dependence on the US currency.

Similar cases have been seen in Latin America. Argentina, Bolivia, Venezuela and the already mentioned Brazil are part of the countries of that region that have expressed their decision to reduce the use of dollars and undertake the use of other currencies for its international commitments.

However, and in line with Kristalina Georgieva, there are specialists who doubt that the de-dollarization process will have an effect in the short term term. One of them is the economist and university professor James Brander, who predicts that the US currency, in the long run, “will continue to be important.”


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