The International Monetary Fund (IMF) does not expect a โrapid shiftโ in the Unitedย States dollar reserves regardlessย of a growing de-dollarization tendency and a looming Unitedย States debt default. โ Doย not kiss your dollars goodbye just yet,โ stated IMF Managing Director Kristalina Georgieva. The IMF chief does not expect the Unitedย States to default on its debt obligations.
Unitedย States Dollarโs Reserve Currency Status Not at Risk, Reportsย 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 Unitedย States dollar will maintain its worldโs reserve currency status.
Georgieva stated that regardlessย of growing de-dollarization discussions by numerous countries to decrease their dependence on the USD:
We doย not expect a rapid shift in (dollar) reserves because the reason the Unitedย States dollar is a reserve currency is asย aย resultย of the strength of the Unitedย States economy and the depth of its financialย resources markets โฆ Doย 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 willย assist member countries reduce reliance on the Unitedย 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 promoteย ย the use of national currencies. Thisย comingย week, nine Asian countries discussed de-dollarization measures in Tehran.
Unitedย States Default Unlikely, Reveals IMF Chief
Commenting on the Unitedย States debt crisis, the IMF managing director stated she is confident theย Unitedย States would avoid a default.
Unitedย States Treasury Secretary Janet Yellen has warned repeatedly that the Treasury may not be able to pay all of the governmentโs bills as early as June 1 โif Congress does not raise or suspend the debt limit before that time.โ The Congressional Budget Office (CBO) similarly predicted that a Unitedย States default could occur in the 1st two weeks of June. Inย theย meantime, worldwide financing bank Goldmanย Sachsย Group stated that the โreal deadlineโ for a Unitedย States default is more like June 8-9.
Georgieva opined:
History tells us that the Unitedย States would wrestle with this notion of default โฆ but come the 11th hour it gets resolved and I have confidence we will see that play again.
The IMF, onย theย otherย hand, recently warned of โvery serious repercussionsโ on both the American and worldwide economies if the Unitedย States defaults on its debt obligations.
