Overview

• The IMF’s latest financial stability analysis reports heightened uncertainty in currency markets following the U.S. tariff announcements.
• Nonresident demand for dollars in spot markets rose, though the increase was smaller than during the COVID-19 shock.
• Some economies shifted to net dollar sales, and nonbank institutions ramped up hedging to guard against potential dollar depreciation.
• The average U.S. import tariff stands near 17.5%, down from roughly 23% in April, yet the effective U.S. rate remains well above global norms.
• Georgieva says the full macroeconomic effects have not yet manifested, with likely U.S. inflation and policy consequences and no broad trade war to date though tariff rates may still change for some countries.