Transcript of IMF Press Briefing (November 10, 2016)
IMF News, November 10, 2016
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- Published: November 10, 2016
Announcements and upcoming engagements
- Managing Director Christine Lagarde will be in Los Angeles on November 14 to receive the Woman of the Year Award from Glamour magazine and a Lifetime Achievement Award; she will make a speech on Women's Economic Empowerment.
- Christine Lagarde will make opening remarks at the IMF statistical forum in Washington; Maury Obstfeld and Deputy Managing Director Tao Zhang will chair related events.
- Christine Lagarde will be in Peru November 18 to 20 for the APEC Leaders' Meeting and will speak at the Universidad del Pacifico.
- David Lipton will be in Beijing on November 21 and 22 for a seminar hosted by the Chinese Academy of Social Sciences.
- Deputy Managing Director Tao Zhang will be in New York on November 16 for the China Life U.S. Representative Office Opening Ceremony of the Overseas Business Dialogue.
- Deputy Managing Director Mitsuhiro Furusawa will attend the 14th Central America Regional Conference in Guatemala on November 17 and 18 and the 52nd Annual Southeast Asian Central Bank's Conference in Myanmar on November 26 and 27.
- Media relations contact: Phone: +1 202 623-7100 Email: MEDIA@IMF.org
U.S. election—implications for the IMF, global economy, and markets
- IMF position:
- The IMF "looks forward to working with the next U.S. administration, to help the challenges facing the U.S. economy and the global economy."
- It is "too early to speculate" on specific policy directions; assessment requires seeing the new administration's defined policy priorities and related actions once in office.
- On markets and financial implications:
- There was volatility the previous day, but "markets this morning seem relatively calm."
- On trade and globalization:
- The IMF regards trade as "an engine of growth for the global economy" while recognizing "the negative side effects of some of these globalization policies need to be taken into account more."
- The IMF has emphasized inclusive growth and has been conducting research and policy work on inequality and how to make growth more inclusive ("growth has been too low for too long for too few").
- On U.S. commitment to international institutions:
- The U.S. is a founding member and "the leading shareholder in the IMF"; the IMF expects its "excellent relationship with the U.S. authorities" to continue.
Inclusivity, inequality, and program design
- The IMF has been conducting research and policy work over "the last number of years" on inequality and inclusive growth.
- Policy approach in programs:
- The social dimension and social protection measures can be "a cornerstone" of IMF-supported programs, not an afterthought (example cited: Egypt program).
- The IMF incorporates analytical work on inequality into program design and policy advice.
Egypt program and related financing
- Program overview pending Board decision:
- Egypt requested a $12 billion Extended Fund Facility; the Managing Director recommended approval and a Board meeting was scheduled for tomorrow (relative to briefing).
- Bilateral financing component:
- The bilateral financing component was "around $5-6 billion" in addition to the IMF $12 billion.
- Commitments for this financing include China, the United Arab Emirates, G-7 countries, commercial bank financing, and a prospective Euro bond issue.
- Disbursement timing (pending Board approval):
- Pending approval, the IMF expects the first disbursement of $2.75 billion would take place "on the same day" as Board approval and "will immediately count toward Egypt's gross international reserves."
- Exchange rate liberalization:
- The Egyptian pound has been floated for about a week; the IMF "thinks it's gone reasonably well at this point" and continues to monitor.
Argentina—statistics and Article IV
- Recent Board action:
- The IMF lifted the censure that had been placed on Argentina regarding statistics.
- Article IV:
- An Article IV discussion on Argentina was held; IMF documentation was expected to be released later the same day.
India—demonetization of 500 and 1000 notes
- IMF view:
- The IMF "support[s] the measures to fight corruption and illicit financial flows in India."
- Given the large role of cash in India, "the currency transition will have to be managed prudently to minimize possible disruptions."
- When countries withdraw high-denomination notes, "the transition needs to be managed very well."
Greece—debt relief, policies, and IMF participation
- Program conditions and debt sustainability:
- The IMF is "working with the Greek authorities and the European partners on a program that adds up and that the IMF can support."
- The IMF considers the current policy package "broadly consistent with a primary surplus target of around 1.5 percent of GDP," and states "no more measures are needed if debt relief is calibrated on the basis of that target."
- The IMF can "support a program based on a long-term primary surplus target of 1.5 percent" and is not "asking for more austerity" provided debt relief is aligned with that target.
- Timing and process:
- The IMF "needs the complete package"—both policies and debt relief—to bring a program to its Board.
- The Eurogroup chairman indicated "new ideas" to be presented at the next Eurogroup meeting on December 5; the IMF "would welcome new ideas" and is open to discuss them.
- The IMF expects publication of the Greek Article IV and the DSA (debt sustainability analysis) in December.
Ukraine—program review, governance, and safeguards
- Program status:
- The IMF-supported program for Ukraine is a four-year, $17.5 billion Extended Fund Facility.
- A staff mission was in Kiev to discuss the third review of the program and the Article IV consultation; timing of completion of the third review depends on the mission's assessment.
- Governance and anti-corruption measures:
- The program has "had a major focus on corruption and governance from the very beginning," including establishment of the National Anti-Corruption Bureau, appointment of anti-corruption prosecutors, and the e-declaration of assets by high-level officials.
- The IMF views these as progress but states "Ukraine will need to take further decisive steps to fight corruption, including by making these new institutions fully operational and bringing cases to court."
- Complementary reforms promoted to reduce corruption risk:
- Streamlining of business licenses.
- Improving transparency in public procurement.
- Bringing energy prices to cost recovery levels.
- Cleaning up the banking system.
- Strengthening tax administration.
- Putting in place an effective framework to prevent money laundering.
- Safeguards on IMF resources:
- The IMF affirms "very strict procedures/processes around IMF resources and financing" (referred to as "safeguards") and a "very clear track record of the effectiveness of those safeguards."
IMF representation and governance
- Membership and representation:
- The IMF has 189 member countries.
- A quota increase approved less than a year prior "did go a significant way to help ensure this proper accurate representation of the membership."
- BRIC countries are now in the top 10 shareholders of the IMF.
- Ongoing work:
- The IMF continues efforts to ensure it is representative of its membership and acknowledges "we still have work to do."
Transcript of IMF Press Briefing, November 10, 2016 — IMF Communications Department