The International Monetary Fund is preparing contingency plans for a rapid sell-off of US dollar-denominated assets, Managing Director Kristalina Georgieva said Monday, as concerns mount over Trump administration policies undermining confidence in the world’s reserve currency.
“At the fund, one muscle that we are building is our ability to hypothetically present scenarios of unthinkable events and then figure out what to do,” Georgieva said at an event in Brussels. Asked whether scenarios include a potential run on dollar assets, she confirmed the IMF runs “all kinds of scenarios” and examines the issue as part of ongoing analysis.
Her comments come as Trump’s sweeping tariffs and attacks on Federal Reserve independence have sparked investor unease about the dollar’s status, which has dominated global finance since World War II. Gold surged to record highs above $5,200 per ounce this week as investors sought safe-haven alternatives.
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The dollar’s share of global foreign exchange reserves declined to 56.92% in the third quarter of 2025 from 57.08% the previous quarter, according to IMF data released in December. While the decline remains gradual, Georgieva’s acknowledgment that the fund is modeling extreme dollar sell-off scenarios marks a rare public discussion of threats to dollar hegemony.
Trump and Treasury Secretary Scott Bessent have stated that weakening the dollar forms part of their re-industrialization strategy, aiming to make American exports more competitive while raising import costs. The administration’s approach represents a deliberate shift from decades of strong-dollar policy.
The IMF on January 19 upgraded global growth projections to 3.3% for 2026 from an earlier 3.1% forecast, citing muted tariff impacts and continued economic resilience. Georgieva cautioned that growth remains below pre-pandemic averages amid high government debt levels and warned against complacency.
Speaking to journalists in Brussels, Georgieva emphasized urgency for European reforms, noting the continent has lagged in productivity for decades. She described Trump-era uncertainty as a wake-up call requiring pragmatic policy responses rather than panic.
The Federal Reserve begins a two-day policy meeting Tuesday with markets expecting rates to remain unchanged despite White House pressure for cuts. Chair Jerome Powell faces mounting criticism from Trump, who has questioned the Fed’s independence.
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