IMF Chief Downplays Dollar Plunge: Doesn't See the Dollar's Role Changing in the Short Term

SnapshotLaborer · 2026-02-09T22:55:48+00:00

The IMF Managing Director downplayed the recent decline of the US dollar, believing its position will not change in the short term, and emphasized that the importance of the dollar lies in the depth of the US capital markets and the size of its economy. A depreciation of the dollar is positive for emerging markets and helps ease debt burdens.

SnapshotLaborer

2026-02-09 22:55:48

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The International Monetary Fund (IMF) Chief Executive Officer downplayed the decline of the US dollar over the past year, stating that the dollar is likely to remain the dominant currency.

IMF Chief Kristalina Georgieva said in a media interview on Monday:

We should not be driven by short-term exchange rate fluctuations. I do not see the role of the dollar changing in the short term. People should seriously consider why the dollar plays such an important role in the international monetary system. The reasons include “the depth and liquidity of the US capital markets, the size of the economy, and American entrepreneurial spirit.”

Georgieva reiterated her views expressed multiple times over the past year. She made these remarks during an IMF emerging markets conference held in Al-Ula, Saudi Arabia.

The Bloomberg US Dollar Index fell 8.1% last year, the largest decline since 2017. This year, the index has fallen another 1.3%, due to tariffs implemented by the Trump administration and weakening US fiscal conditions, which have raised concerns among global investors.

US Treasury Secretary Janet Yellen stated last week that the US has always pursued a strong dollar policy and that the government has not intervened to weaken the dollar. Her statement came shortly after Trump was asked whether he was concerned about dollar depreciation, to which he replied, “No, I think that’s good.”

Georgieva said that a weaker dollar could be “good news” for many emerging markets because it helps reduce their foreign debt interest burdens. Countries that have borrowed in dollars will now pay less in interest.

Previously, according to JPMorgan’s index data, the extra yield demanded by investors for holding emerging market sovereign dollar bonds rather than US Treasuries has fallen to about 250 basis points. This is the lowest level since January 2013 and nearly 500 basis points narrower than during the peak of the COVID-19 pandemic five years ago.

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