International Monetary Fund (IMF) Managing Director Kristalina Georgieva said on Wednesday she was confident the United States would avoid debt default.
U.S. Govt. could default on next month's bills and even default on its debt, if Congress does not raise the $31.4 trillion cap on government borrowing, a failure that could trigger economic catastrophe and panic on global financial markets.
The latest round of talks on the debt ceiling between President Joe Biden's representatives and congressional Republicans ended without progress on Tuesday, as the June 1 deadline loomed.
Finance ministers from Saudi Arabia and Qatar, who joined Georgieva for the panel discussion, agreed that a resolution was needed sooner.
"I hope wisdom prevails and a resolution can be reached sooner. It's not easy when a player is important in the international market because every symptom will affect other players around him."
Georgieva said that the US dollar is likely to remain the global reserve currency despite talk of countries moving to reduce their dependence on the US dollar, known as "de-dollarisation".
"We do not expect a rapid shift in reserves (US dollars) because the reason the US dollar is a reserve currency is because of the strength of the US economy and its capital market involvement," said Georgieva.
During Georgieva's visit to the Gulf countries, she met with Emir Sheikh Tamim bin Hamad Al Thani.
Qatar has pledged 20% of its Special Drawing Rights (SDR) holdings towards the IMF's Poverty Reduction and Growth Trust (PRGT) and Resilience Support Trust (RST) mechanisms for financial support, Georgieva said on Twitter.
SDRs are international reserve assets created by the IMF to supplement other reserve assets of member countries. According to the IMF website, Qatar has SDR holdings of 985 million.
