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According to the International Monetary Fund (IMF), the US dollar could depreciate over the medium term, a prospect that has alarmed global markets. The greenback, which has long been the world’s reserve currency, is rapidly losing ground. Analysts warn that, if left unchecked, this decline could dramatically weaken the dollar’s influence.
IMF experts anticipate various possible outcomes stemming from the US tariff policy. For instance, the dollar could strengthen if import demand falls, reducing the need for foreign currencies. In turn, other countries may ease monetary policy, allowing their currencies to weaken in order to support flagging export demand.
Another scenario involves a sharp decline in demand for dollar-denominated assets. This could be driven by rising uncertainty over US economic policy and worsening growth forecasts. For now, the process appears orderly. Over the medium term, however, the greenback risks substantial devaluation if tariffs begin to drag down productivity in key export-oriented sectors.
Thus, the economic backdrop is growing increasingly tense. Amid the uncertainty stoked by the White House, markets have seen a significant flight from both the dollar and US Treasuries.
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