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The IMF warned about the consequences of the dominance of the dollar

The IMF warned about the consequences of the dominance of the dollar

experts of the International monetary Fund (IMF) believe that the dominance of the greenback in global trade and Finance can enhance the effect of the crisis caused by the pandemic coronavirus infection COVID-19.

“the strengthening of the dollar can amplify the fall in world trade and economic activity in the short term”, — quotes “Interfax” extract from IMF studies.

As specifies The Financial Times, the drop in currency exchange rates emerging markets (emerging markets) to the dollar in conditions of a pandemic have contributed to the hope for the growth of the export competitiveness of these countries.

However, I believe the IMF, developing countries are unlikely to take advantage of the weakening of their national currencies to the dollar to stimulate the economy, because the dynamics of their courses in the short term has little effect on the export prices are set in dollars. At the same time, a stronger dollar leads to growth of import prices and reduced demand for imported goods and services.

we will Remind, on the eve of the International monetary Fund has estimated the fall of the US economy in the II quarter of this year, 37% yoy. The IMF also predicts that by the end of the year, the fall in GDP will make 6.6 per cent, “despite the unprecedented policy support to the economy”.

“the Main risk is the most difficult to quantify is the fact that the jump in cases COVID-19 in the United States could lead to a new partial halt of activities to save lives,” said the Fund.

In mid-June, the head of the Federal reserve system (FRS) Jerome Powell acknowledged that the US economy faces long-term challenges from rising unemployment and waves of bankruptcies of small businesses in a pandemic, despite the recent signs of recovery. According to him, “the longer the crisis lasts, the higher the likelihood that prolonged damage due to the constant loss of jobs and closure of business.”

At etom Powell expressed concern about the impact of the crisis on small business. He stressed that small and medium-sized enterprises are the “heart” of the American economy.

However, the head of the Federal reserve is confident that the measures of direct state aid “is not only to support households and business, but also to limit the lingering damage to the economy”.

we Add that the outbreak of pneumonia caused by a coronavirus infection (COVID-2019), was formally recorded in December 2019 in the Chinese city of Wuhan. March 11, 2020, the world health organization (who) officially recognized the situation with coronavirus pandemic. To date, cases of infection were recorded in almost 200 countries and regions of the world. In General, the number of infected COVID-2019 in the world exceeded 14.7 million people, died more than 609 thousand people. The pandemic has had devastating effects on the world economy. Under the powerful kick hit many industries, including transport, tourism, hospitality, automotive, construction, retail, and entertainment.

Stories about how you tried to get help from the Russian state in terms of coronaries and what came of it, email it to COVID-19@rosbalt.ru

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