International Monetary Fund (IMF) Managing Director Kristalina Georgieva said Monday that a shift away from the US dollar is occurring at present, but that she does not see an alternative to the dollar as a world reserve currency in the foreseeable future.
“The reason the dollar plays its role is the strength of the US economy, the depth of the capital markets here,” Georgieva said in remarks at the Milken Institute in Beverly Hills, California.
“And if you are thinking of an alternative, in a world in which we may migrate to CBDCs [central bank digital currencies] massively, there could be different propositions, but ultimately the strength of the US economy, the depth of the capital market, the ability to present that trust in the currency is going to be the leading factor.
“”And there I don’t see an alternative, I don’t see it coming any time soon,” she admitted at the event.
The IMF chief said the standing of the US dollar and de-dollarization are not on the the list of issues that she worries about.
“The biggest competitor to the dollar is the euro, it has taken some space. Everybody else – the pound, the yen, the RNB – they play a very modest role,” Georgieva said.
In recent years the “de-dollarization” movement has gained momentum as various countries seek to end their dependence on the US currency.
Georgieva’s remarks largely echoed those previously made by Russian Deputy Foreign Minister Alexander Pankin, who previously told Sputnik that he was unsure as to whether the US dollar would disappear as a dominant reserve.
However, Pankin also relayed at the time that “each dominant currency has its own life cycle,” as was the case for the Europe’s de facto currency in the 17th and 18th centuries, as well as the Portuguese escudo in the 20th century.
