Daily Management Review

Head of IMF: Dollar is losing its reserve currency status


According to IMF Managing Director Kristalina Georgieva, nations are steadily moving away from using the dollar as a reserve currency, and pointed out that there wouldn’t be any substitutes for it any time soon.

"Yes, the dollar is being gradually abandoned. Earlier, it made up roughly 70% of reserves; today, that percentage is just under 60%," according to Kristalina Georgieva speaking at an American Milken Institute event. She claims that the dollar's primary rival right now is the euro.

Because of the stability of the American economy and breadth of the capital markets, Ms. Georgieva continued, the IMF is not concerned about the possibility of giving up the dollar as a reserve currency. "I therefore don't see any other options. They won't show up anytime soon, in my opinion," she remarked.

According to Janet Yellen, the head of the U.S. Treasury, the dollar will continue to function as the world's reserve currency for a very long time. She believes it will be challenging for China and Russia to develop an alternate currency.

source: reuters.com