Transcript of IMF Press Briefing (September 16, 2021)
IMF News, September 16, 2021
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- Published: September 16, 2021
Organizational announcements and upcoming events
- General allocation of Special Drawing Rights in the amount of $650 billion was completed in the month of August; SDRs have been distributed to IMF membership.
- Upcoming remarks and events involving the Managing Director and senior IMF staff:
- Kristalina Georgieva: panel on investment funds and financial stability (tomorrow, at 8:00).
- Kristalina Georgieva: Columbia University Earth Institute Conference on Sustainable Development (September 21, at 8:15 a.m., with Jeff Sachs).
- Kristalina Georgieva: Global COVID-19 Summit hosted by the United States, "Ending the Pandemic: Building Back Better" (September 22).
- Kristalina Georgieva: High-Level Dialogue on Energy (September 24).
- Kristalina Georgieva: International Conference on Enhancing Digital and Global Infrastructure in Cross Border Payments (September 27).
- Kristalina Georgieva: Opening remarks at Financing for Development Event on Jobs, Social Protection, and Poverty Eradication (September 28).
- Geoffrey Okamoto: Forum on National Affairs, State Council of China (September 23).
- Bo Li: Official Monetary and Financial Institutions Forum symposium, "Revolutionizing Finance for Net Zero" (September 29).
- Antoinette Sayeh: Panel on Post-Pandemic Assessment of the Sustainable Development Goals (September 29); High-Level Policy Dialogue on Embedding Climate Change into Asia’s Recovery Strategy (September 30).
- Annual Meetings: Curtain Raiser Speech on October 5 at Bocconi University, Milan; Annual Meetings will be in hybrid format with small numbers of official country delegates at IMF Headquarters and all public events virtual.
Special Drawing Rights (SDRs) — use, channeling, and mechanisms under consideration
- Key fact: allocation amount was $650 billion (completed August 23 referenced elsewhere).
- IMF encourages responsible and transparent use of SDRs to help replenish depleted central bank reserves and support macroeconomic adjustment and reforms.
- Channeling options discussed by IMF staff and Executive Directors (informal Board discussion held):
- Use of the Poverty Reduction and Growth Trust (PRGT) to channel SDRs to low-income countries (noted as "probably the easiest, the most well-established option").
- Creation of a new Resilience and Sustainability Trust to support poorer and vulnerable countries for greener, more sustainable recoveries (modalities and objectives still under discussion).
- Channeling SDRs through other multilateral development banks (noted as a third option with less preliminary support).
- Past precedent cited: a recent mobilization freed up some $24 billion of resources for low-income countries based on a $15 billion SDR channeling to the PRGT.
- Next steps: IMF will take Executive Directors’ feedback on board and revert with an updated proposal "in the coming weeks"; hoped for further progress by the time of the Annual Meetings.
Country engagements, program status, and access to IMF resources
- General principle: IMF engagement with countries is guided by international community recognition of governments; lack of clarity on recognition prevents access to IMF resources (including SDRs).
- Guinea:
- IMF is closely monitoring unfolding events and urging a peaceful resolution.
- Fifth and sixth reviews under the program were completed last December.
- Rapid Credit Facility was provided during the pandemic.
- Ukraine:
- A virtual review mission is planned for later this month (specific dates to be announced closer to the mission).
- IMF focus areas with Ukrainian authorities include: strengthening governance and autonomy of the National Bank of Ukraine, judicial reform, restoring and strengthening the anti-corruption framework, and ensuring a sustainable fiscal position.
- No specific timeline for disbursements or program extension given; discussions are ongoing.
- El Salvador:
- IMF has publicly expressed views on the adoption of bitcoin as legal tender.
- Article IV discussions are ongoing and are expected to conclude "in the period ahead, in the coming months"; these would serve as the basis for discussions on a potential IMF program aimed at inclusive growth, financial stability, and fiscal sustainability.
- Economic governance issues, fiscal transparency, and anti-corruption measures remain key in Article IV and program discussions.
- Venezuela:
- IMF welcomes dialogue aimed at resolving the political stalemate and addressing the humanitarian crisis.
- Due to lack of clarity within the international community regarding recognition of a government in Venezuela, Venezuela cannot access IMF resources at this point, including the SDR allocation.
- Afghanistan:
- IMF engagement is suspended until there is clarity within the international community on recognition of a government; accordingly, the IMF program is on hold and Afghanistan cannot access IMF resources, including SDRs.
- IMF stands ready to work with the international community to advocate urgent actions to address the humanitarian crisis, allow remittances and small-scale transfers, and provide assistance to hosting countries.
- Ethiopia:
- The IMF program consists of two arrangements: an Extended Credit Facility (ECF, concessional) and an Extended Fund Facility (EFF, non-concessional).
- The ECF is set to expire in September; the EFF arrangement remains operational.
- Authorities have performed and staff-level agreements have been reached during the program; the IMF is in regular contact and continuing policy dialogue, but it is "too soon to precisely map out staff engagement" on any new program.
- Lebanon:
- IMF has had courtesy calls with members of the new government and stands ready to engage; no timeline provided.
- Countries decide how to use their SDR allocations; IMF guidance recommends using SDRs to replenish depleted reserves and to support macroeconomic adjustment and reforms in a transparent and responsible manner.
- Myanmar:
- IMF is not engaging with the new regime; lack of international recognition prevents access to SDR allocation and IMF resources.
- IMF cannot ascertain whether funds are being used as intended and is concerned about implications for addressing COVID-19 in Myanmar.
- Argentina:
- Technical discussions toward an IMF-supported program are ongoing to address macroeconomic imbalances and support sustainable and inclusive growth; no update on timing of a new program or mission dates.
- IMF does not comment on political developments.
Pandemic response, vaccine targets, and related coordination
- Joint statement issued with WHO, World Bank, and WTO (issued at 9:00 the day of the briefing) urging redoubled efforts on vaccine equity.
- Vaccination status cited:
- World reached 40 percent vaccination rate (at least one dose) "this week" (as of the briefing).
- Only 2 percent vaccination rate in low-income countries.
- IMF/WHO/World Bank/WTO targets communicated earlier in the summer:
- Vaccinate at least 40 percent of the population in every country by the end of this year.
- Vaccinate at least 60 percent in all countries by the first half of 2022.
- WHO additional global target referenced: vaccinate 70 percent of the world’s population by the middle of next year (noted as compatible with IMF targets but the IMF emphasizes country-level targets).
- IMF staff and partners are meeting regularly to monitor and accelerate progress on vaccine equity.
Policy commentary and other IMF internal policy processes
- U.S. debt ceiling:
- IMF view: important to find a solution that avoids counterproductive brinkmanship.
- IMF has previously suggested considering replacing the ceiling with a clear, simple medium-term fiscal objective or automatically adjusting the debt ceiling consistent with taxes and appropriations agreements.
- Review of access and surcharge policies:
- G-20 Finance Ministers and Central Bank Governors called on the Fund to complete outreach on access and surcharge policies.
- Managing Director has initiated the process; staff characterize next steps likely starting with an informal Board meeting to gather preliminary views before formal Board consideration. No date provided.
- Leadership appointments:
- Elan Goldfajn returning as head of the Western Hemisphere Department noted as an asset given his experience (former IMF staff member and former Governor of the Central Bank of Brazil).
Italic: Transcript of IMF Press Briefing, September 16, 2021 — IMF Communications Department