IMF Says US Dollar Will Remain the Global Reserve Currency despite De-Dollarisation

On Wednesday May 24, local time, Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), said she was confident the U.S. would avoid a default on its debt.

In January, U.S. federal government debt hit the legal limit of about $31.4 trillion.

The U.S. Treasury then deployed so-called extraordinary measures to temporarily stave off a debt default, but only until early June.

U.S. President Joe Biden and the Speaker of the House of Representatives have held several rounds of negotiations in recent days, but with little progress, and concerns have grown as negotiations continue to be deadlocked.

Georgieva said at Qatar's Doha Economic Forum on Wednesday that the U.S. has historically faced risks of debt defaults before, but they were resolved at the last minute, so she was confident seeing it happen again.

Georgieva also touched on her thoughts on "de-dollarisation," saying the greenback will likely remain the global reserve currency despite growing talk around reducing reliance on the greenback.

U.S. Treasury Secretary Janet Yellen has repeatedly warned that the Treasury could be unable to meet its payment obligations as early as June 1.

However, Republicans in the House of Representatives did not buy this argument.

House Republican leader Steve Scalise said on Tuesday that Yellen's statement on the debt ceiling deadline lacked transparency and was unconvincing.

White House press secretary Karin Jean-Pierre slammed the views of Republicans. She pointed out that the consequences of a debt default will have a serious impact on the American people and the US economy, and will damage the US's international reputation.

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