International Monetary Fund Director Kristalina Georgieva announced that uncertainty is the new normal and that in times of uncertainty, investors are seeking stability through safe assets such as gold.
“The world is experiencing a transition to multipolarity. This is reflected in the structure of the international monetary system, but this does not eliminate the dollar’s continued vital role,” Georgieva said in an exclusive interview with Al Arabiya Business during the AlUla Emerging Markets Conference.
depth and fluidity
He explained that this role is based on the depth and liquidity of America’s capital markets, the size of the American economy, its initiative and entrepreneurial spirit, as well as the American economy’s ability to achieve sustainable growth that positively impacts the economies of the rest of the world.
Georgieva noted that the dollar appreciates and depreciates over time, noting that its current level is higher than the average of the past 10 years, and stressing that the dollar’s position should not be judged by short-term fluctuations.
Regarding emerging markets, Georgieva explained that this development is not necessarily negative, as many emerging markets borrow in dollars and the high cost of borrowing means that a weaker dollar means less spending on debt servicing.
center of influence
Looking at the increasing multiplicity of centers of world development and influence, Georgieva said that “other currencies are also gradually beginning to strengthen their role in the world’s foreign exchange reserves.”
He explained that the dollar has continued to lead for a long time, with its share accounting for more than two-thirds of global foreign exchange reserves.
He added: “The euro is emerging as a reserve option for countries, alongside the currencies of smaller, more reliable economies such as Switzerland, Australia and Sweden, where the currency accounts for an increasing share of national foreign exchange reserves.”
She thought this was a natural development. He stressed that the dollar remains the first destination when economies look for a haven of stability in times of turmoil.
Kristalina Georgieva, Managing Director of the International Monetary Fund, announced that uncertainty will become the new normal and that in times of uncertainty, investors will seek stability through safe assets such as gold.
“The world is undergoing a transition to multipolarity. This is reflected in the way the international monetary system operates, but this does not negate the continued central role of the dollar,” Georgieva said in a special interview with Al Arabiya Business during the AlUla Emerging Economies Conference.
depth and fluidity
He explained that this role is based on the depth and liquidity of the U.S. capital markets, the size of the U.S. economy, its initiative and entrepreneurial spirit, as well as the U.S. economy’s ability to achieve sustainable growth that positively impacts the economies of the rest of the world.
Georgieva noted that the dollar appreciates and depreciates over time, noting that its current level is higher than the average of the past 10 years and stressing that the dollar’s position should not be judged based on short-term fluctuations.
Regarding emerging markets, Georgieva clarified that this development is not necessarily negative, as many emerging markets borrow in dollars and a weaker dollar means less debt service spending due to higher borrowing costs.
center of influence
Looking at the world’s development and the diversification of centers of influence and power, Georgieva said that “other currencies are also gradually starting to strengthen their role in the world’s foreign exchange reserves.”
He explained that the dollar has long been at the forefront, accounting for more than two-thirds of the world’s foreign exchange reserves.
He added: “The euro is emerging as a reserve option for countries where the currency’s share in national reserves is increasing, alongside the currencies of smaller, more reliable economies such as Switzerland, Australia and Sweden.”
She thought this was a natural development. He stressed that the dollar remains the primary destination when economies seek a haven for stability in times of turmoil.
