Key Words: ‘Don’t kiss your dollars goodbye just yet’: IMF chief sees U.S. dollar remaining global reserve currency

“‘Don’t kiss your dollars goodbye just yet.’”

— Kristalina Georgieva, managing director, International Monetary Fund

Don’t count International Monetary Fund Managing Director Kristalina Georgieva among the naysayers expecting the U.S. currency to lose its luster due to “de-dollarization.” In remarks at an economic forum in Doha Wednesday, she argued that the U.S. dollar was likely to retain its status, Reuters reported.

“We don’t expect a rapid shift in [dollar] reserves because the reason the dollar is a reserve currency is because of the strength of the U.S. economy and the depth of its capital markets,” she said. A debate over de-dollarization — countries moving away from the dollar as a reserve and medium of exchange — has raged this year. The question is whether a meaningful shift away from the dollar is under way that would have implications for the U.S. or global economy. See: Why Washington and Wall Street are worried about the ‘de-dollarization’ threat Skeptics of de-dollarization contend that moves to price some commodity transactions in units other than the dollar pose little threat to the currency’s dominant role in the financial system, while the greenback’s share of global forex reserves has always tended to ebb and flow. The ICE U.S. Dollar Index
DXY,
+0.39%,
a measure of the currency against a basket of six major rivals, rose 0.4% to a two-month high on Wednesday. The index, which rose sharply is up around 0.4% for the year to date. On a more immediately pressing matter, Georgieva played down the risk of a default by the U.S. government as the White House and congressional Republicans continue to negotiate over lifting the debt ceiling. Such showdowns are a somewhat regula …

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