The International Monetary Fund (IMF) Executive Director for Russia, Aleksei Mozhin, has raised concerns about the potential collapse of the international monetary system. Mozhin highlighted the reliance on trust in dollar assets and the growing mistrust leading to central banks and households turning to gold and other precious metals.
Mozhin suggested that BRICS countries could provide an alternative to the US dollar if the current system fails. He proposed creating a unit of account based on a basket of currencies from the member countries, including Brazil, Russia, India, China, and South Africa. This unit could potentially become a real currency backed by commodities in the event of a collapse.
Additionally, Mozhin addressed the issue of public debt in high-income countries like the US, stating that they are facing a deadlock. He advocated for debt relief or restructuring for low-income countries and outlined options for advanced economies to address their debt crises.
The IMF representative emphasized the need for rich nations to take action to reduce public debt, either through budget surpluses, sustained economic growth, or inflation. However, he noted that the IMF has ruled out these possibilities for the US, leaving the country with limited options.
As the global economy faces uncertainties and challenges, Mozhin’s insights shed light on the potential risks and solutions for the international monetary system and public debt issues. Stay tuned for further developments on this critical issue.