The International Monetary Fund (IMF) does not expect a “rapid shift” in the United States dollar reserves regardless of a growing de-dollarization tendency and a looming United States debt default. “ Do not kiss your dollars goodbye just yet,” stated IMF Managing Director Kristalina Georgieva. The IMF chief does not expect the United States to default on its debt obligations.
United States Dollar’s Reserve Currency Status Not at Risk, Reports by IMF
The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, expressed her confidence Wednesday at the Qatar Economic Forum in Doha, organized by Bloomberg, that the United States dollar will maintain its world’s reserve currency status.
Georgieva stated that regardless of growing de-dollarization discussions by numerous countries to decrease their dependence on the USD:
We do not expect a rapid shift in (dollar) reserves because the reason the United States dollar is a reserve currency is as a result of the strength of the United States economy and the depth of its financial resources markets … Do not kiss your dollars goodbye just yet.
A growing number of countries are ramping up their de-dollarization efforts. The BRICS economic bloc is pushing for the use of national currencies, instead of the USD, and is discussing creating a common currency that will assist member countries reduce reliance on the United States dollar. The BRICS comprises Brazil, Russia, India, China, and South Africa.
The proposition of a common currency is expected to be discussed by the BRICS leaders at their next summit. Additionally, 10 Southeast Asian countries, members of ASEAN, likewise recently agreed to promote the use of national currencies. This coming week, nine Asian countries discussed de-dollarization measures in Tehran.
United States Default Unlikely, Reveals IMF Chief
Commenting on the United States debt crisis, the IMF managing director stated she is confident the United States would avoid a default.
United States Treasury Secretary Janet Yellen has warned repeatedly that the Treasury may not be able to pay all of the government’s bills as early as June 1 “if Congress does not raise or suspend the debt limit before that time.” The Congressional Budget Office (CBO) similarly predicted that a United States default could occur in the 1st two weeks of June. In the meantime, worldwide financing bank Goldman Sachs Group stated that the “real deadline” for a United States default is more like June 8-9.
History tells us that the United States would wrestle with this notion of default … but come the 11th hour it gets resolved and I have confidence we will see that play again.
The IMF, on the other hand, recently warned of “very serious repercussions” on both the American and worldwide economies if the United States defaults on its debt obligations.