Transcript of IMF Press Briefing
IMF News, May 7, 2020
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- Published: May 7, 2020
IMF-wide response to COVID-19: scale and instruments
- Over 100 countries have requested, or expressed interest in, assistance from the IMF.
- The IMF has doubled access to its emergency facilities, the Rapid Credit Facility and the Rapid Financing Instrument, to meet up to 100 billion in anticipated demand, "$100 billion in expected demand".
- These emergency facilities provide immediate assistance once approved by the IMF Executive Board, "in a matter of days", and "without the usual IMF conditionality".
- As of May 6, 2020, the IMF Executive Board has approved financing under these emergency facilities for 50 countries, totaling about $18 billion.
- The IMF has provided immediate debt service relief to 25 countries under the revamped Catastrophe Containment and Relief Trust (CCRT).
- The IMF is aiming to triple concessional financing to the poorest countries under the Poverty Reduction and Growth Trust (PRGT).
- The IMF Board approved the establishment of a Short-Term Liquidity Line to further strengthen the global financial safety net.
- The IMF maintains a public policy tracker covering "190, or so, countries" that catalogs policy measures taken to address COVID-19.
Governance, transparency, and anti-corruption in emergency financing
- The IMF Board adopted an enhanced framework on governance in 2018, increasing focus on anti-corruption as a macroeconomic issue across Article IV surveillance, lending programs, and capacity development.
- For emergency financing the IMF:
- Asks member governments to commit in their letters of intent to ensure assistance is used for the urgent purposes agreed under the emergency financing.
- Assesses public financial management, anti-corruption, and anti-money laundering measures and asks members to put in place needed measures "without unduly delaying the urgently needed disbursements".
- Requests enhanced reporting of crisis-related spending and publication of independent, ex-post audits of crisis-related spending.
- Encourages procurement transparency by publishing procurement contracts and publishing beneficial ownership information of firms awarded procurement contracts to prevent conflicts of interest and corruption.
- Ensures emergency resources are subject to IMF safeguard assessment policy; where shortcomings exist, staff makes time-bound recommendations and closely monitors implementation.
- A fact sheet with further details and country-specific examples is available on IMF.org.
Country-specific updates and positions
- Argentina
- IMF practice: negotiations between Argentina and private bondholders are a bilateral matter; the IMF is not directly involved.
- The IMF is hopeful an agreement with creditor participation can be reached that "restores that sustainability with high probability" and stands ready to help Argentina to respond to health and economic effects of Coronavirus and to develop a plan to restore sustainable and inclusive growth over the medium term.
- Ukraine
- Context: In December, the IMF and Ukrainian government had reached agreement on policies underpinning a new three-year arrangement under the Extended Fund Facility; implementation of prior actions was interrupted by the pandemic.
- Current status: Ongoing virtual mission discussing policies that could be supported by an 18-month Stand-By Arrangement rather than the Extended Fund Facility, to provide balance of payments support for near-term containment and stabilization; once recovery is underway, focus could shift back to longer-term structural reforms.
- India
- The IMF supports India's response, including the proactive nationwide lockdown, fiscal stimulus, monetary easing, and liquidity and regulatory measures.
- The IMF sees the immediate priority as coordinated policy response to fight the virus, prevent long-term damage to productive capacity, and provide support to the most vulnerable.
- The IMF believes "further stimulus is warranted, especially fiscal, expenditures on health, food, and income support for vulnerable households and support for businesses."
- A detailed, well-communicated, and credible medium-term fiscal consolidation plan, alongside increased fiscal transparency, would help boost market confidence and reduce the cost of borrowing.
- Sri Lanka
- The IMF has received a request from Sri Lanka for emergency financial support under the Rapid Financing Instrument and will coordinate closely with the government to assess relevant factors.
- The Sri Lankan authorities have expressed interest in options for future engagement, including replacing their Extended Fund Facility arrangement with the Rapid Financing Instrument.
- South Africa
- South Africa has requested support under the Rapid Financing Instrument.
- Access under this instrument is "up to 100 percent of their quota share".
- Staff are in discussions with the government and plan to present the request to IMF management and the Executive Board.
- Zambia
- Zambia qualifies as a PRGT-eligible country and also "qualifies to apply for a rapid credit facility".
- The authorities have requested emergency assistance from international partners, including the IMF, in addition to an earlier request for Fund support for Zambia’s economic reform program.
- Discussions with Zambian authorities on COVID-19 responses and macroeconomic objectives and policies are active.
- Zimbabwe
- The CCRT provides debt relief only to countries with debts owing and upcoming repayments to the IMF; Zimbabwe does not owe the IMF and therefore is not eligible for the CCRT.
- Zimbabwe is in good standing with the IMF, having repaid arrears to the IMF.
- To become eligible for further financial support the IMF would expect Zimbabwe to clear arrears with other financial institutions and reach understandings with bilateral creditors; future requests would require readiness to implement strong macro policies and structural reforms.
- The IMF is engaged in policy dialogue and providing technical assistance to Zimbabwe.
- Egypt
- Egypt has requested support from the IMF; the request includes the Rapid Financing Instrument and a Stand-By Arrangement.
- The IMF expects the request to be presented to the Executive Board on Monday, May 11th.
- Under the Rapid Financing Instrument countries are entitled to "up to 100 percent of quota"; the precise amount for Egypt will be decided by the Executive Board.
- Lebanon
- The IMF welcomed the government’s economic recovery plan as an important step to address economic challenges and to identify reforms to restore external and public debt sustainability and improve living standards.
- An IMF team will start discussions next week with Lebanese authorities on the details of their economic reform plans.
Scheduling and communications notes
- The briefing on May 7, 2020, was embargoed until 10:00 a.m., Washington Time.
- Upcoming Managing Director events referenced:
- May 7: Panel at 10:00 a.m. on reopening the economy while protecting public health.
- May 8 (tomorrow relative to briefing): One-on-one conversation at 11:30 a.m., Washington Time, on global cooperation amid COVID-19.
- May 12: Virtual Fireside Chat at 9:40 a.m. focused on IMF assistance to distressed economies.
- May 18: Ted interview at noon on "building back better".
- May 19: Conversation at 8:30 with Kevin Rudd under the Asia Society Policy Institute.
- Deputy Managing Director Tao Zhang spoke at the Boao Forum for Asia on "Asian Development Prospects and Challenges under the Pandemic."
- The IMF has begun releasing analytical chapters from flagship documents including the World Economic Outlook, the Fiscal Monitor, and the Global Financial Stability Report; recent releases include a Fiscal Monitor chapter on fiscal policies to aid recovery and a chapter on the role of state-owned enterprises.
Transcript of IMF Press Briefing — May 7, 2020 — IMF Communications Department