Transcript of a Press Briefing by Gerry Rice, Director, Communications Department, IMF
IMF News, October 29, 2015
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- Published: October 29, 2015
Upcoming events and logistics
- Press briefing embargoed until 10:30 a.m. (Washington time).
- Managing Director Christine Lagarde engagements:
- Thursday, November the 5th: keynote address at the New York Fed Conference on Reforming Culture and Behavior in the Financial Services Industry; on-stage conversation with U.S. Fed Vice Chair Stanley Fisher; webcast.
- November 8th through 12th: visit to the Gulf region including Saudi Arabia, Qatar (annual GCC ministerial meeting), and Kuwait (global conference on Islamic Finance co-organized by the IMF).
- 16th Annual Research Conference:
- Dates: November 5th and 6th.
- Theme: “Unconventional Monetary Policy and Exchange Rate Policies.”
- Keynote lecture by Ben Bernanke.
- First ARC chaired by new economic counselor Maurie Obstfeld.
- Registration open; panels and lecture webcast.
Ukraine debt and IMF lending-into-arrears policy
- Context and status:
- Issue centers on debt restructuring in Ukraine and in particular the three billion Eurobond that is owed to Russia.
- Ukraine has remained current on this bond as on all other Eurobonds.
- IMF encourages both sides to engage in constructive discussions on restructuring to provide necessary financing for the program supported by the IMF and to help restore debt sustainability.
- IMF welcomed the agreement reached between the Ukrainian government and an ad hoc creditors’ committee of holders of Ukraine’s sovereign and sovereign guaranteed debt.
- Lending-into-arrears workstream:
- This is part of a broader program of work on reform of the Fund’s lending framework governing sovereign debt restructurings, phased over the last several years.
- The program of work has included discussion of reforms that would allow the Fund to lend in the presence of arrears to official bilateral creditors in carefully circumscribed circumstances.
- Reference to a 2013 board paper: “consideration could be given to extend the lending into an arrears policy official bilateral arrears and in that context clarify the modality through which assurances of debt relief are provided by official lenders.”
- Timing and Board action:
- No date provided for Board meeting or completion of this particular work.
- Mr. Rice: “I would not expect it to be completed in the next week. No.”
- Characterization: “I think it would be reasonable to expect the board would take up this issue in the near future.”
- Current policy stance:
- “As of now, as of this moment, the policy of not lending into official arrears stands.”
- It will stand until the Board decides otherwise.
Afghanistan and Pakistan earthquake assistance
- Requests and engagement:
- No specific request for IMF assistance received as of the briefing.
- Managing Director expressed condolences to Afghanistan and Pakistan.
- IMF working closely with authorities in Afghanistan to assess the effect of the earthquake and to assist; mission in the field in Pakistan at the moment.
- Mr. Rice: “I’m not aware of a specific request yet but we are working closely with the authorities in Afghanistan to assess the effect of the earthquake and to assist them.”
IMF representation, quotas, and Euro area seat proposal
- European Commission proposal to give the Euro area a single seat on the Board:
- Mr. Rice declined to comment separately from the broader quota and governance reform package.
- IMF supports governance reforms that would enable it to be more representative of changing dynamics in the global economy (reference to the 2010 set of reforms).
Greece: IMF role, program status, and debt relief
- IMF engagement and condition for support:
- IMF staff participated in a visit to Athens to discuss developments and policy implementation.
- Work aims to advance the first review of the ESM program.
- IMF fully engaged with Greek authorities and European partners; technical assistance provided.
- Mr. Rice reiterated two pillars needed for Fund support: “a strong and well-specified policy package combined with debt relief.”
- Debt relief and strong policy implementation are linked and both necessary to provide the basis for a credible program that could be supported by the Fund.
- Timing and specifics:
- No timeline provided for negotiations on debt relief.
- On IMF contribution or size: no indication provided; assessments and further discussions awaited.
- Past IMF program: “The old program runs until March, right, next year, so that program is still running; yes.”
- Banking sector and recapitalization:
- ECB assessment of Greek banks expected imminently (end of the week at the time of briefing).
- Adequate recapitalization, ambitious financial sector measures, strengthening bank governance, and addressing the non-performing loan (NPL) issue are key to restoring confidence and ensuring viability of the financial sector.
Venezuela relations with the IMF
- Membership and operational relations:
- Venezuela is a member of the IMF.
- IMF has not had operational relationships with Venezuela in quite some time; no Article IV consultation since the mid-2000s.
- No negotiations or discussions taking place regarding financial assistance programs or otherwise with the IMF in an official capacity.
Special Drawing Rights (SDR) and Renminbi inclusion
- SDR basket review:
- Work on SDR basket review and the request from China for the Renminbi to be included continues as scheduled.
- Board was informed in the summer of the status.
- IMF staff are finalizing a report “that would be considered at a further formal Board meeting planned for November.”
- No specific Board date announced at the time of briefing.
Climate risk and world economic projections
- A referenced report/conference claim:
- Mr. Rice had no specific update on whether climate risk would be included as a factor in the World Economic Outlook projections.
- IMF has produced analyses on broader climate change issues: fiscal implications, linkages to energy subsidies, taxation issues.
- No firm announcement provided on including climate risk in world economic projections.
Middle East messages and fiscal risks from oil-price shocks
- Managing Director’s Gulf trip messaging:
- IMF has published Middle East Regional Economic Outlook and previously articulated messages on the fiscal and balance-of-payments risks from low oil prices.
- These issues expected to be part of the agenda during the visits.
Inequality, surveillance, and program design
- Operational next steps:
- IMF to include issue of inequality on a country-specific basis in surveillance work and Article IV consultations; work underway.
- Mr. Rice: “The next step is to make it more operational in our Article IVs and in our surveillance work.”
- Consideration of inequality in IMF programs is conditional and would “depend on the circumstances of each program.”
Jamaica: health spending and IMF-supported program
- IMF response to criticism:
- Mr. Rice disagreed with the claim that IMF is responsible for Jamaica’s health-care problems.
- Noted sensitivity to social spending needs and importance of health spending.
- 2015-2016 budget for Jamaica includes a significantly increased allocation to the Ministry of Health to ensure sufficient drugs and other medical supplies.
- IMF-supported program in Jamaica includes higher cash transfers for poorer households under the government’s main social program.
- Broad IMF finding referenced: in low-income countries under IMF programs, social spending on health and education on average increases under IMF programs.
Cyprus
- Relationship and program progress:
- Mr. Rice noted an “excellent relationship with the authorities” and that Cyprus “continues to make progress under the program.”
- Credit attributed to Cypriot authorities for commitments and efforts under difficult circumstances.
Transcript of a Press Briefing by Gerry Rice, Director, Communications Department, IMF — October 29, 2015
References
- Islamic Republic of Afghanistan and the IMF
- Cyprus and the IMF
- Greece and the IMF
- Jamaica and the IMF
- Pakistan and the IMF
- Ukraine and the IMF
- República Bolivariana de Venezuela and the IMF
- Cuba and the IMF
- Special Drawing Rights (SDRs) -- A Factsheet
- IMF Policy Advice -- A Factsheet
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