Transcript of a Press Briefing by Caroline Atkinson, Director, External Relations, International Monetary Fund

July 2, 2009

Washington, D.C.
Thursday, July 2, 2009

Webcast of the press briefing Webcast

MS. ATKINSON: Good morning. I’m Caroline Atkinson, Director of the External Relations Department at the IMF. Welcome to all of you and to those journalists online to our biweekly press briefing. As usual, this is embargoed until 10:30 a.m. Washington time, 1430 GMT. Let me start by mentioning some upcoming events and Management travel that may interest you.

On Monday, July the 6th, we’re going to launch the web site of the Annual Meetings which, as you know, will be held in Istanbul this year. The site will include general information on the events, including a tentative calendar. And, perhaps most importantly for you right now, it means the online press accreditation begins on Monday. So you can register online through that site from Monday.

On July 8th, and this is a change of date, on July 8th, we will release the World Economic Outlook, the WEO, and the Global Financial Stability Report, GFSR, updates. Those are the shorter updates. Olivier Blanchard, Director of the Research Department, and José Viñals, Director of the Monetary and Capital Markets Department, will give a press conference here at headquarters on July the 8th, that is Wednesday. The documents will be shared with the press under embargo a couple of hours before the briefing starts, and we will send out a media advisory on this event later today.

On Management travel, I’d like to mention that on July the 6th the Managing Director, Dominique Strauss-Kahn, will be in Geneva to participate in the WTO’s Second Global Review of Aid for Trade. Following that, he will travel to L’Aquila, Italy, to participate in the summit of the G-8 leaders on July 9th and 10th.

So let me turn to your questions and remind journalists participating online to submit questions now. Please identify yourselves and your affiliation.

QUESTIONER: Do you have any update for us on the discussions with Turkey? The President said that an agreement was close. So I was wondering if you have any update for us.

MS. ATKINSON: I don’t have any sort of new update for you. As before, our discussions are continuing, and there is a broad convergence of views on what are the necessary economic measures for Turkey. They will need to be taken with or without a Fund program. But there is no update. I mean no update beyond that.

QUESTIONER: A question about Latvia: Is there a sort of timeline for when the Fund expects to have the 200 million euro disbursement as part of the current agreement with Latvia?

MS. ATKINSON: We don’t have any timeline. We’re continuing to discuss with the Latvian authorities and with international partners how best we can support them.

QUESTIONER: We’re going around the world today, but I was wondering if you have any update on Sri Lanka. I believe a mission is returning to Sri Lanka for discussions. And, while I’m around there, Pakistan, I also believe a mission is going to Pakistan. On both occasions, what are the discussions going to center on?

MS. ATKINSON: I can come back to you on that on Sri Lanka. We did have a mission, a mission there, but I don’t believe that there is a mission there right now. But discussions are continuing, and the finalization of the program, as with any other program, would of course depend on the Executive Board. We don’t have a date for an Executive Board meeting at present on Sri Lanka.

On Pakistan, there will be a mission. I believe it begins over this weekend or early next week. I won’t have news for you until the mission has had those discussions with the authorities.

QUESTIONER: A question about the staff report and the use of the term fundamental misalignment. Is that staff report or that staff recommendation, if I understand it correctly, something that the Executive Board will consider? And, if so, is there a schedule for when they might discuss that report?

MS. ATKINSON: That is actually the operational guidance that Management gives to the staff. So it doesn’t affect the Executive Board or the Executive Board decision. The Executive Board actually discussed the general issue in late May, and the guidance was operational as of June 23rd. I believe the paper was dated June 22nd.

QUESTIONER: I was wondering what the Managing Director’s message is going to be to the G-8. I mean obviously the Fund goes in with an assessment, and he will discuss that, I’m sure, with the leaders. But I was wondering if you could just give us a sense of what he thinks right now is the most important thing, also considering the WEO is coming out next week. I mean, just generally the message.

MS. ATKINSON: Well, I don’t want to anticipate the WEO and GSFR as they will be coming out next week. I believe the Managing Director has indicated that he thinks it’s important for policies to remain focused on continuing to recover and build a way out of this crisis, and then also to begin to think about exit strategies from the extraordinary policies that we’ve had. And I’m sure that he will give the latest update as he will be there on the 9th and 10th.

Also, part of the discussions I think will be with a broader group of countries than just the G-8, and so I’m sure he will talk also about how the crisis that originated in the industrialized countries has affected the world and the best and most balanced way out of that.

I believe there will also be a discussion on Africa, and, as you know, we’ve done a lot of work on low income countries and how to support them during this crisis. So I expect that will be part of the discussion also.

QUESTIONER: China indicated yesterday that it was going to raise the issue of the reserve currency. I’m just wondering if the IMF has taken up this issue, has looked closer into it other than just being a broad debate. I was wondering if it had been taken a little further.

MS. ATKINSON: We don’t have anything that we’ve taken up particularly now. I suppose if it’s put on the table, we’re asked to look at it, of course, we will. It is quite a long-term issue, I think, as both the Managing Director and John Lipsky have said.

QUESTIONER: And a follow-up back to the fundamental misalignment. So, if I understand you correctly then, it’s guidance for the staff for when they prepare reports.


QUESTIONER: But is the Executive Board allowed to use that term in any Article IV Consultation document or does that guidance only apply to the staff?

MS. ATKINSON: Well, the staff writes the reports, which are then considered by the Executive Board. The Executive Board then has a summing up or a decision. So the guidance to the staff is not going to constrain whatever the Executive Board decides to do.

But I think that what we have felt and I think what’s made clear in that paper, also based on the Triennial Review of Surveillance, is that the 2007 Surveillance Decision has improved the candor and analysis on exchange rates, and that’s the part that was the Executive Board decision. But there were some hiccups with the implementation of the guidelines which initially included a labeling/nonlabeling issue, which we felt that, although that was an attempt to foster candor, it didn’t actually work so well.

So we believe that the revised guidance, which is, as I said, operational, will support more candid and open discussions of policies both with staff and countries and in the Executive Board.

QUESTIONER: Having said that, I was wondering when the China Article IV was going to the Board?

MS. ATKINSON: The China Article IV is going on July 8th. The mission finished, I think, on June 10th.

QUESTIONER: And that will date back to two or three years? I mean, because it’s been updated along but has never been concluded.

MS. ATKINSON: I think the last Article IV was discussed and released in 2006. I’m sure that it will focus mostly on what is happening now and the prospects for the future. But we always have a table that looks at and some discussion of the recent past. But it will focus on current issues and future challenges. But I haven’t actually read it yet.

QUESTIONER: What’s the status on the sale of IMF gold?

MS. ATKINSON: The U.S. Congress has passed legislation that allows the Executive Director here to support it.

It’s a two-step process. We first have a Board meeting where an 85 percent majority of the Board needs to approve the sale of gold, and then we will come back to the Board on the modalities, which would sort of lay out exactly the how and when, although there was a framework for those modalities, you know, that it would be within the overall framework of official sales and so on. So we have some information on that, but there would be two Board discussions.

QUESTIONER: And has there been a date scheduled for a Board meeting to discuss that?

MS. ATKINSON: No, we don’t have a date yet. I think we’re expecting that it will be, and I think I’ve said this before, this Summer. As we’re into July, there’s less of this Summer left, but I think that’s what we’re expecting.

I don’t think we have any questions online. It’s the July 4th holiday coming up in the U.S., but maybe others have also got their minds on other things. So thanks very much.


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