Argentina and the IMF
People's Republic of China and the IMF
Ecuador and the IMF
Spain and the IMF
Turkey and the IMF
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Transcript of a Press Briefing by Thomas C. Dawson
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MR. DAWSON: Good morning, ladies and gentlemen. I'm Tom Dawson, Director of External Relations at the IMF, and this is another of our regular briefings, which, as usual, will be embargoed until approximately 15 minutes after conclusion, and we'll set a precise time at that point.
This is our first post-Meetings session, but I think it is important to try to have our sessions on a regular basis, notwithstanding the fact that you've probably had your full of us or your fill of us, in the last couple of weeks.
Generally speaking, we would like to do these briefings on Thursdays, but as I'll get to in a moment, the Managing Director is traveling at the end of today, which is why we did it today.
In addition, we have decided to move the briefing time back slightly, until 10 o'clock, in the future as opposed to 9:30.
Regarding management travel and public engagements, the Managing Director, Rodrigo de Rato, will be traveling to Istanbul, Turkey, where he will be on April 28th and 29th to participate in the second meeting of the Investment Advisory Council for Turkey, which brings together government officials, the country's leading business associations, international companies, the World Bank Group, as well as the Fund. There will be a press conference at the conclusion of those meetings on Friday afternoon with, I believe, Prime Minister Erdoğan.
The Managing Director will be in Paris, France, on Tuesday, May the 3rd, for meetings there, and there are plans for a press conference at the Fund office in Paris. I believe our tentative planning time is around 10:30 or 10:45 on Tuesday morning, May 3rd, and Media Relations will send you an advisory on this later.
First Deputy Managing Director Anne Krueger will be speaking on May 9th at the Oxford Union in Oxford, the United Kingdom. Her address is entitled "It's Not Too Late to Seek a Newer World: What Globalization Offers the Poor." On May 12th, she'll participate in the Cato Institute's Book Forum here in Washington entitled "The Hindu Equilibrium: India Circa 1500 B.C. to 2000 A.D."
And now let me take your questions. And please practice proper etiquette and identify yourself and your organization, as your parents would want you to. They may be watching. You never can tell.
QUESTIONER: No, no, they're never watching this one. Talking about Turkey, the Economy Minister said they'd sent in their Letter of Intent. When can we expect a Board meeting?
MR. DAWSON: Indeed, he did, I believe—he did announce that they sent in, I believe yesterday—I believe he had a press conference this morning, and he indicated his hope that we would have it—I think in the press statement I read of his report was the week of May the 9th. That's essentially what I understand as well. I think my guidance was originally mid-May.
We are quite happy about having gotten that done. There have been questions here about when it would be accomplished. But the history of the Turkish program is that sometimes there are delays in getting the agreement actually done. But it's always been—we've always reached agreement and then wound up having a very strong program, which we continue to have.
I think I'll just leave it at that unless there's any follow-up on Turkey. As I say, the Managing Director will be there on Friday and have a press conference.
QUESTIONER: I have a question on Ecuador. If I remember correctly, the IMF sent a letter to the authorities saying—sort of supporting their policies so they could get money from the World Bank and the IDB. That's why I seem to remember. But I wonder—my question is how the recent developments in Ecuador are going to affect the relationship with the Fund or whether that letter is still valid or, I mean, what is going on with the Fund on Ecuador?
MR. DAWSON: You know, as with the other international financial organizations, we're waiting to see how the political and diplomatic situation develops, and at that point we'll be in a better position to explain, you know, what the next steps are. So I just think we're in a wait-and-see. We do have a resident representative there who is reporting to us on what's going on.
QUESTIONER: Have they contacted you in any way, the new authorities?
MR. DAWSON: There have been discussions in Quito. I think there have been some news reports even on some of them. But there's an information gathering. As I say, we're working with the other international financial institutions. But in terms of a next step as a formal state in terms of a mission or anything like that, there's nothing—there's nothing like that. As I say, we're waiting for the diplomatic and political situation to become clearer.
QUESTIONER: Did the IMF take note of the economic program of the new Italian Government? And does the IMF have a judgment on that?
MR. DAWSON: I don't—in terms of the political developments in Italy in terms of the formation of a new government, I think we're waiting to see what happens. I don't think it's appropriate for us to comment on it at this point—what?
MR. DAWSON: But there's a new government coming in.
MR. DAWSON: Already formed. We will, I'm sure, be in touch. This is a case, of course, we had our Article IV not that long ago, so our contacts with them are on a, you know, periodic basis, not on a day-to-day basis. So I don't think I have anything new in that regard.
QUESTIONER: A follow-up question on Ecuador and then on China. Ecuador—I was asked by our office—
MR. DAWSON: You're making me go to two parts of my briefing book at once. Go ahead.
QUESTIONER: I was asked by our office in Quito regarding some reports that Ecuador had stopped payments to the international institutions.
MR. DAWSON: I have no report on that. Were that to happen, it, of course, as we always do, would be posted promptly on our website. I don't believe there's any—I've heard nothing about that.
QUESTIONER: Okay. The other one is on the Chinese yuan, as you know, that there were reports and other speculation going on now in financial markets that the Chinese Government is about to move on the yuan, and I was wondering if the IMF has got any comments on those comments.
MR. DAWSON: I think our position has been quite clear. We have for some time believed that it is in the interest of China to adopt a more flexible exchange rate system, and the reasons I think, again, are well known. More flexibility would allow for an autonomous monetary policy and cushion against shocks. Such a move toward flexibility is best taken from a position of strength, and the current conditions would be favorable for such a step, and this has been our position for at least six months. I think substantively it's been our position for even longer.
So obviously we are following it. We keep in close contact with the authorities, providing them advice as they request. We have a very active technical assistance effort with the Chinese and continue to be impressed, I should add, by the growth in the economy. I believe the first quarter numbers just came out at 9.5 percent, which is certainly a position of strength.
QUESTIONER: On Argentina, I have two questions. One, as you, I'm sure, know, the judge in New York who embargoed the bonds might rule today, and so I wonder how important you think that ruling is for Argentina and, you know, the future relation with the Fund. And the second question would be the Managing Director in the meeting said that the IMF wouldn't ask Argentina to open—reopen the debt offer.
So what are the options that the IMF thinks that Argentina has to solve the problem?
MR. DAWSON: With regard to the first question, I was doing my Spanish language reading this morning, which is some—you know, I read a little more slowly in Spanish than I do in others, and I saw the word that you just used in English, "embargo." Now, in American English "embargo" sounds like something quite different, but I guess the Spanish translation of the "freeze" is "embargo." I'm happy you brought it up that way because in reading it this morning, I kind of, you know, thought maybe I'd missed something. But, you know, the judicial action proceeds, and we are not a party to that, and we don't have any comments on that.
Regarding the issue of the non-participating creditors, I could do no better than noting what the Communique said, which is also what the Managing Director said, in terms of what the IMFC Communique said, that the Committee welcomes Argentina's rapid recovery, that the recent debt exchange also represents an important step toward the long-term goal of sustainable growth, and that Argentina will now need to formulate a forward-looking strategy to resolve the remaining arrears outstanding to private creditors consistent with the Fund—IMF's lending into arrears policy, as well as to continue with additional—with necessary structural reforms.
So we have indicated that it is our belief, the Managing Director—the other adjective that we use is a "realistic" strategy, and the authorities know that, and I'm sure they are considering what their next steps would be.
I would also note, having seen the press in Argentina also in the last day or so, that—I would just note to bring you up-to-date on what the state of discussions is, that we did start technical discussions in Washington on the Article IV consultations. The discussions were cordial and productive, and we expect that the discussions will continue at a policy level in the next few weeks. And we will be, as is our custom, informing you of that when it is closer.
QUESTIONER: So there's no mission planned to go for this Article—
MR. DAWSON: No, I would note that the last discussions were here in Washington. I don't know—I mean, it would not be surprising nor necessarily unusual if the next discussions were in Washington as opposed to Buenos Aires. But when we have something on that, I'll let you know.
QUESTIONER: [inaudible] they're saying Lavagna's coming next week.
MR. DAWSON: Well, you know, I can't speak for the Minister. You can speak for the Minister, maybe, but I can't.
QUESTIONER: But do you expect—
MR. DAWSON: When we have something firm—when we have something firmed up, we will let you know. I had actually not heard about the Minister himself coming. But I haven't done my reading completely, I guess. But, you know, when we have something—when we have something, we will let you know, and if the Argentines have something to announce, I'm sure they'll announce. I'm always impressed with the number of publications there are in Buenos Aires.
QUESTIONER: I have an Africa question. I believe that the MD is going to Africa. What is he going to do there and—
MR. DAWSON: I think it's a little early for me to give a detailed agenda. I believe he will be attending the African Development Bank annual meeting in Abuja. I believe he also will be attending a regional meeting in Benin. And he will be also visiting Niger and Chad. But details and dates I don't have for you at this point. But we will put that out. I believe the likelihood is we will put it out before my next press briefing because it is in May.
QUESTIONER: Well, since nobody is asking, on this issue of judicial decision, I understand that you don't want to comment on the judicial proceedings, but the IMF has insisted that, you know, a regional agreement with the creditors is very important for Argentina, and this decision stopped the swap, actually.
So, you know, my question is how important it is for Argentina to resolve the issue of—and actually do the swap, the bond swap?
MR. DAWSON: I don't think I need to go there in that question. The hearing has, I believe, started just when the press conference started this morning, and we'll just wait for the resolution.
Okay. Well, thank you very much. We will lift the embargo at 10:30 Washington time, which is 3:30 GMT time.
Thank you very much.
[Whereupon, the press briefing was concluded.]
IMF EXTERNAL RELATIONS DEPARTMENT