IMF recommends using reserves ‘prudently’ to offset dollar strength


Central banks should “prudently” use their FX reserves to defend local currencies against the US dollar’s strength, said Gita Gopinath and Pierre-Olivier Gourinchas in a blogpost published by the IMF on October 14.

The current and former IMF chief economists stressed the dollar has steeply appreciated in 2022. It has risen by 13% against the euro, 22% against the yen and 6% against emerging market currencies.

Considering the US currency’s share in global exports is 40%, a stronger dollar makes

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