Transcript

Transcript of IMF Press Briefing

June 27, 2019

MS. ANDERSEN:  Good morning everyone, both to you here in the room, and to those who are watching online.  Welcome to this Press Briefing on behalf of the International Monetary Fund. I'm Camilla Andersen with the Communications Department. As usual our briefing this morning is embargoed until 10:30 a.m., and that's Washington Time. If you allow me, as we always do, I'll make a few announcements before turning to your questions. On June 28^th and 29^th, that's Friday and Saturday, Managing Director, Christine Lagarde; and First Deputy Managing Director, David Lipton, will be in Osaka, Japan, to attend to G20 Summit.

The following week on July 5^th and 6^th, Madame Lagarde will attend the Plenary Session at the B7 Business Summit in Aix-en-Provence in France

And that same week on July 2^nd, Mr. Lipton will be in Toronto to participate in a Panel at the Ukraine Reform Conference.

Looking a bit further ahead, on July 23^rd in Santiago, Chile, we will be presenting our World Economic Outlook Update, and that will include our new global forecasts.  That will be press conference, led by our Economic Counselor, Gita Gopinath.  And my colleagues in the Media Relations Team will have more information for you as that date approaches.

So, with that said, let me know move to your questions.

QUESTIONER:  Thanks Camilla. I have a few questions.  The first one is if there's any scheduled meeting between Madame Lagarde and David Lipton, either with President Mauricio Macri, Finance Minister Nicolás Dujovne in Osaka?  That will be the first.

The second, Alejandro Werner is meeting today with one of our Presidential Candidates, Alberto Fernández. I was hoping if you could talk a little bit about what's the message that Alejandro is going to convey in that meeting.  Alberto Fernández has been a very outspoken critic of the Argentine program, and everyone in the opposition is already demanding a re-negotiation with the IMF.  Those two questions, thanks.

MS. ANDERSON: Okay.  Thank you.  So, on your first question, I can indeed confirm that the Managing Director is expected to meet with President Macri, and Economy Minister Nicolás Dujovne, at the G20 Summit, in Osaka.  I don't want to preempt what comes out of that meeting, but they are expected to meet.

On the second meeting that you mentioned, yes, indeed, Mr. Alejandro Werner, the IMF's Director of the Western Hemisphere Department, and Mr. Trevor Alleyne, the Resident Representative in Argentina, will meet with Mr. Alberto Fernández, and also with Roberto Lavagna, today. And they’ll exchange views on the current economic outlook for Argentina.  And they also want to learn more about Mr. Fernández's and Mr. Lavagna's economic policy priorities.  So, it's really going to be a conversation.

And you know, the IMF proactively engages with political stakeholders in all countries, but especially in program countries, it's very important for us to reach out to a broad spectrum of political stakeholders to hear their views, and also to understand their overall objectives and key policies, and how they see them under the IMF-supported program.

You know, the IMF is engaged before with members of the opposition, and political candidates in several program countries actually; and just recent examples include, Portugal, Jamaica, Mexico, Colombia and Ukraine.

QUESTIONER: And a follow up on the Osaka Meeting between Lagarde; currently the Fourth Revision of the Argentine Program is ongoing.  Can you give us a little bit of details whether, you know, that review is going to be part of that discussion, however, the situation so far if we are expected to have a staff agreement announced any time soon?

MS. ANDERSEN:  So, you know, the conversations regarding the Fourth Review are ongoing, so I'm sure they will be touched upon.  You know, as we've stated before, broad support for the country's economic plan is really crucial for Argentina's economic stabilization and return to growth.  So, I'm sure, you know, they will discuss those issues at the meeting.

Maybe I could turn to our online viewers -- we have some questions that have come in, a number of them actually.

We have one on Egypt, and the question is: "Egypt's Finance Minister, two days ago, says that the Government aims to complete a non-disbursing agreement with the International Monetary Fund by next October to replace a three-year that expires in July.  Can you please comment on that?"

So, I'll just say a few words about Egypt, if I may.  On Egypt we're not currently negotiating a new IMF-supported program, the priority at this junction is to successfully complete the current program.  Discussions regarding the nature of any future engagement would come after that. I would also add that as with all our member countries, we stand ready to support Egypt and its people as they continue to the process of transforming the economy enabling it to achieve high-sustained growth that will create jobs and new opportunities.

I'll have another online question.  This one is on Sri Lanka, and the question is: "Net foreign outflows from Sri Lanka's government securities market seem to continue; isn't it advisable for the Central Bank of Sri Lanka to reenter the path of monetary tightening?"

On Sri Lanka, I would just remind our online audience and everyone else who doesn’t follow Sri Lanka that closely, the background and the status of where we stand with that country.  So, on May 13^th, the IMF's Executive Board completed the Fifth Review of Sri Lanka's 1.5 Billion loan under the Extended Fund Facility, and so far we've disbursed 164 million. That agreement has included an extension of the program until June 2020, to help Sri Lanka anchor macroeconomic stability in the wake of those terrible terrorist attacks that were experienced by the country.  So that's sort of where we are on Sri Lanka.

And then in terms of a specific response to the question, I would say that we would note that market conditions in Sri Lanka are normalizing, and indeed on June 24^th, the country successfully tapped the international bond market for 2 billion at five- and ten-year maturities, and that issuance was well oversubscribed. In response to the specific question on monetary policy, we would say that the Central Bank of Sri Lanka should continue to follow inter dependent approach.  Adjusting policy rates as warranted by evolving macro-economic conditions.  So that’s on Sri Lanka. 

So another online question This one is on Zimbabwe. 

Would you update on Zimbabwe and if it would seek financing from the IMF next year. 

The answer on Zimbabwe is that the Fund cannot provide financial assistance to Zimbabwe before three conditions essentially have been met.  And they include clearing existing arrears to international financial institutions.  Arrears have been cleared with the IMF but not with other institutions.

And second, obtaining financing assurances from official bilateral creditors.

And third, reaching agreement on a coherent set of macroeconomic policies that can restore economic growth, lay the foundation for job creation.  So those are the three conditions for the IMF to be able to lend to Zimbabwe.

That said, we are actually already supporting Zimbabwe.  You will recall that IMF Management approved in May a staff monitored program for Zimbabwe and that program runs until 2020.  And that really is to help them anchor their economic policy and help them get back on track. So, the staff monitored program is supporting the reform agenda, you know, it seeks to help them with the large fiscal adjustment they need.  You know, eliminating central bank financing of the fiscal deficit and also adopting reforms to allow for the effective functioning of market based foreign exchange and debt markets. 

Very importantly, the staff monitored program also includes safeguards to protect the country's most vulnerable people.  So that was a pretty comprehensive answer on Zimbabwe but I thought it was just worth giving all that information.

We have a question on Moldova. The question is for an update on Moldova and the resumption of negotiations with the Fund. 

As we speak, there is a mission in Moldova in Chisinau and they are reviewing the current IMF supported program.  To support Moldova's economic and financial reform program, the IMF approved a program, actually two, in 2016 of three-year support facility under the extended credit facility and the extended Fund facility. 

And three reviews have already been completed.  The last one on June, in June 2018.  And so far, we have made $112 million available to Moldova. 

So the mission that is currently in discussion with the authorities will seek to take stock of recent economic developments of course, progress with the program implementation and it will also access, assess and update the macroeconomic outlook and discuss with the new government and the national bank their macroeconomic and financial policies in the period ahead.  So that was Moldova. 

QUESTIONER:  One more question regarding the meetings that our representatives have in Buenos Aires.  You know, several reference from both Mr. Lavagna and Mr. Fernández have sort of like spoken openly about structural reforms in an eventual renegotiation with the IMF. Could you please tell us what is the position of the IMF if that's going to be on the table?  Thanks.

MS. ANDERSEN:  So, you know, what we have stated about Argentina is that we see strong, sustained and consistent policy implementation and broad ownership of the economic plan that continues to be crucial for the country's economic stabilization and return to growth.  And, you know, we have also acknowledged that the authority's policy efforts have led to important progress already including on the fiscal and external accounts. The current plan is designed to return Argentina's economy to balance at the end of the program and so far it's been effective in addressing these major macroeconomic imbalances.

You know, irrespective of political outcomes, strong support and implementation of the broad goals of stabilizing Argentina's economy will continue to be essential to enhance that countries resilience to external shocks and just to bolster medium term growth.  So that’s what I have.

I have one final question online.  Which is about [an update on] Congo. That is the Republic of Congo. 

So the status of Congo is that an IMF team that was led by Alex Segura, the mission chief, visited Congo in early May and reached a preliminary staff level agreement for a three year program on the, under the extended Fund facility and we issued a press release of course to that extent.

The goals would seek to stabilize -- the program would seek to stabilize the economy, achieve more sustainable growth, reduce corruption and would also look very importantly to achieve greater transparency in the management of public resources and restore debt sustainability. 

So we also have a question on whether we had reports of any new trade finance facilities so I'll answer that. 

The IMF does not monitor of course all the financial transactions or trading plans of the national oil company.  That said, we are not aware of any new oil back loans that would have an impact on debt sustainability. 

And the government has also confirmed that it's disclosing all these loans to the IMF and they have actually also sent the report to parliament to that effect on the nature, the use of these loans.  The program doesn't allow for any new external debt to be contacted by the government.  So that was the Republic of Congo.

I think it is probably fine to wrap there so, I would like to thank you for coming today and just to remind everyone of the embargo which is 10:30 a.m. this morning, Washington time.  Thank you.