IMF update

 

Dear MARIA,   In today's edition, we highlight: Chart of the Week: Dollar’s Share of Reserves Holds Steady Georgieva on Enhancing GCC Resilience to Global Shocks Explainer: Five Megatrends Shaping the Rise of Nonbank Finance Podcast: Virtual Reality of Financial Crime F&D magazine: Uncertainty about Uncertainty Credit and Product Innovation in Emerging Markets Recent IMF data shows that the U.S. dollar's share of global reserves declined to 56.32% in Q2 2025, down from 57.79% in Q1. However, when adjusted for significant exchange rate fluctuations, the dollar's share would have decreased only slightly to 57.67%. This indicates that currency valuation effects, rather than changes in central bank holdings, primarily drove the apparent decline. The Chart of the Week shows that currency movements explain 92 percent of the reduction of the dollar’s share during the three months through June. Similar exchange rate effects can be seen in other currencies, including for the euro, the world’s No. 2 reserve currency. Read Our Analysis GULF COOPERATION COUNCIL Georgieva on Enhancing GCC Resilience to Global Shocks (Credit: IMF Photo) Global uncertainty has increased, including related to shifts in the global trade system, while oil prices have declined and geopolitical tensions have intensified. Yet, despite these challenges, "the GCC continues to deliver strong and steady performance and is still a bright spot in the world economy," said IMF Managing Director Kristalina Georgieva at the Gulf Cooperation Council (GCC) Ministerial Meeting in Kuwait. She added that the policy objectives to enhance resilience and accelerate economic diversification become even more important in this increasingly challenging environment.  Read the Speech FINANCE Explainer: Five Megatrends Shaping the Rise of Nonbank Finance (Credit: pawel.gaul/iStock by Getty Images) Half of all financial services worldwide are now offered by companies that are not classified and regulated as banks. Jay Surti outlines the 5 trends driving their growth in a new explainer blog. New lenders for governments  More access to funding for mid-sized businesses  More borrowing options for consumers and small businesses.  Greater diversification for investors Greater stability for markets  Read the Blog PODCAST  Virtual Reality of Financial Crime (Credit:IMF Photo) While countries came together in the late 80s to fight money laundering and the financing of terrorism, technology and the advent of virtual currencies have further complicated the tracking of illicit financial flows across borders. Over $51 billion in cryptocurrency was used by criminals last year to circumvent traditional banking regulations. Chady El Khoury is an assistant general counsel and heads the Financial Integrity Group at the IMF. In this podcast, El Khoury says the anonymity of virtual currency transactions is supercharging the ability of criminals to grow their empires. Listen to the Podcast F&D MAGAZINE Uncertainty about Uncertainty (Credit:Joey Guidone) High levels of uncertainty can freeze investment and consumption, tank markets, and help spark a recession. What are we to make of this in assessing the direction of the global economy? Measuring uncertainty is not easy. Text-based measures now show exceptionally high levels of uncertainty. Financial-market-based measures, meanwhile, show only moderate levels of uncertainty. And survey-based measures, which spiked during the pandemic, have largely flatlined.  Read the Article FINANCIAL INCLUSION Credit and Product Innovation in Emerging Markets: Evidence from India This Working Paper shows how access to bank financing affects product innovation in a developing country. It analyzes a reform that broadened credit eligibility for many small Indian manufacturing firms. Newly eligible firms borrow more, but use the credit to expand existing product lines rather than innovate. And most firms face several additional barriers that weaken the impact of credit on innovation. For firms that do not face these additional barriers, credit access boosts innovation, as in advanced economies. Read the Working Paper Weekly Roundup AFRICA The Economic Impact of Uncertainty in Mali Economic uncertainty in Mali has increased. Heightened policy uncertainty is expected to weigh on GDP growth in Mali by reducing the ability of businesses and households to plan ahead with confidence, which typically results in lower investment and consumption. This paper highlights some ways the authorities in Mali could reduce policy uncertainty, which would create the conditions for stronger GDP growth.  Read the Paper FISCAL POLICY How to Summarize and Interpret Income Tax Schedules  This note describes a method that can help in understanding the impact of tax reforms on tax systems. The approach is also used to discuss universal basic incomes, the issue of whether tax allowances should be phased out, and the difference between tax credits and allowances. Read the Note Thank you very much for your interest in the Weekend Read! Be sure to let us know what issues and trends we should have on our radar.  Noha Elbadawy  Editor | IMF Weekend Read   nelbadawy@IMF.org Stay connected with the International Monetary Fund:       This email was sent to politikimx@gmail.com on behalf of: International Monetary Fund 1900 Pennsylvania Ave NW · Washington, DC · 20431

(Credit: courtesy of Swati Bhatt) The US is a breeding ground for startups, and California has been the center of that universe since the dot-com boom in the late 1990s. But rising costs, tighter quarters, and increasing bureaucracy have many tech innovators seeking greener pastures, well beyond Silicon Valley. Princeton University’s Swati Bhatt has been studying the evolution of America’s startup boom in recent years and has uncovered a surprising trend toward rural communities, better known for raising cattle than for high-tech infrastructure. In this podcast, Bhatt talks to journalist Rhoda Metcalfe about these new entrepreneurs opting for a different lifestyle Listen to the podcast About Swati Bhatt Swati Bhatt is a faculty member of the Department of Economics at Princeton University. Read the transcript here.   This podcast is available on all streaming platforms.   Apple Podcasts | Spotify| YouTube| Amazon Music Thanks for listening to the podcast. We're always looking to improve your experience so let us know if you have any suggestions.   Bruce Edwards  Producer | IMF Podcasts   bedwards2@IMF.org Stay connected with the International Monetary Fund:       This email was sent to politikimx@gmail.com on behalf of: International Monetary Fund 1900 Pennsylvania Ave NW · Washington, DC · 20431