Transcript of IMF Press Briefing

November 18, 2021

MR. RICE: Well good morning, everyone and welcome to this briefing on behalf of the International Monetary Fund. I am Gerry Rice, the Communication Director here at the Fund. And as usual this morning, our briefing will be embargoed until 10:30 a.m. That's Washington time. Great to see colleagues online here this morning on the screen and I'm seeing some questions come in online as well. I hope everyone is doing okay and keeping safe and well.

Let me make a few quick announcements and then come to your questions online and on screen. Today the 9th Statistical Forum of the IMF is taking place virtually. The theme of this year's forum is, Measuring Climate Change: The Economic and Financial Dimensions. And the forum will be building on the release of climate change indicators, a new dashboard that has been developed by the IMF by our Statistics Department here at the Fund in collaboration with other international organizations.

You can plug into this forum in particular today at 3:15. The Managing Director of the Fund, Kristalina Georgieva will be in the closing session of the forum with professor Johan Rockstrom of the Potsdam Institute. Of course, internationally recognized climate change scientist. That's at 3:15 this afternoon, the Statistical Forum of the IMF.

On Tuesday, November 30th, the Managing Director will give introductory remarks at the 7th Richard Good lecture here at the Fund. How do people think about the economy, including a presentation from Harvard's Professor Stefanie Stantcheva. And again, you plug into that, it will be streamed live and available to you.

Early in December, Kristalina will also be taking part in the Reuters NEXT summit and she will be doing a one-on-one interview with Andrea Shalal, well known to us on here at the briefing.

On Thursday, December 2nd at 8:30, our Deputy Managing Director Bo Li will be delivering opening remarks for the IMF panel discussion on New Monetary Policy Tools for emerging and developing economies. Panelists include Lesetja Kganyago, the Governor of the South African Reserve Bank, Elvira Nabiullina, the Governor of the Bank of Russia and Carmen Reinhart who is, of course, the Senior Vice President, Chief Economist at the World Bank. And the event will be moderated by our own Tobias Adrian who is our Financial Counselor. That's December 2nd. New Monetary Policy Tools. And again, it's streamed live, you can plug in.

Finally, on Monday December 6th, Kristalina Georgieva will present the Euro Area Article IV concluding statement of our mission at the Euro Group in Brussels. And we anticipate, as usual, a press briefing or certainly a press media interaction after that presentation in Brussels on the Euro Area Article IV.

With that, let me turn to your questions on screen and let me begin this morning with colleagues from Argentina. I see Lilliana there, I see Raphael there and I see Mariano Bortner of Infobae plugging in from online with several questions. So, let me take Argentina. Raphael, I see you there. I don't know if you want to begin this morning. Lilliana was there.

QUESTIONER: Yes, hi Gerry. Good morning. Good to see you again.

MR. RICE: Likewise, Raphael.

QUESTIONER: I'm sure you're going to provide us with an update on the negotiations, but I wanted to ask you about the review, the pending review of the SDA signed by President Macri. The IMF was supposed to finish a staff review of that loan. Shouldn't that be put out before Argentina signs a new agreement with the IMF?

And another question if I may, I wanted to know if there was any planned meetings either here or in Buenos Aires between the staff and Minister Guzman. Thanks.

MR. RICE: Thank you, Raphael. Lilliana, do you want to come in and I'll just try and take these Argentina questions in a package.

QUESTIONER: Yes, good morning. Do you hear me?

MR. RICE: Loud and clear, Lilliana.

QUESTIONER: Okay thank you. Because I have some problems with the connection. Well, I would like to know if Argentina really has presented to the IMF a program with the IMF in the last few days and if it is possible to have -- to reach an agreement with the IMF before the first of December. Thank you.

MR. RICE: Thank you, Lilliana. I want to and this is another question on screen on Argentina. I will just take these questions from Mariano Bortner of Infobae and similar line of questioning. Do you have a timeline for the ex-post evaluation of Argentina's standby agreement. That's what Raphael was talking about as well.

Mariano is asking, are there any meetings planned in Buenos Aires or Washington until the end of the year to discuss the new program. Again, similar to Raphael and Lilliana. Mariano has one more. Any comments on the announcement by President Fernandez on his plans to have an economic program to be discussed in Congress. So, I think those are all questions around the same themes. Let me try and give you the information that I have.

So, on the status of the program discussions and discussion in general between the IMF staff and the Argentine authorities, I would characterize it as we continue to work towards reaching full understandings on a comprehensive plan that can durably address Argentina's most pressing economic and social challenges. And that would aim to strengthen economic stability by tackling high inflation which disproportionately affects the most vulnerable.

We have said just recently over the last few days that it's important that this plan would have broad political and societal support. And our goal remains, as I've said here before, to help Argentina and the Argentine people set the basis for more sustainable and inclusive growth.

We are actively engaged with the authorities and I don't have any information on specific timings or schedule of meetings. But the engagement remains strong and is frequent. I don't have an update, as I said, on the timing of meetings or on the new program. But again, we continue to work toward reaching full understandings on a comprehensive plan.

There were questions about this what we call at the IMF this ex-post evaluation report on the previous Argentine program. Okay, the previous program. Again, I've talked about this before here and just as a reminder, that this ex-post evaluation is something that we do in the case of all what we call exceptional access programs which was the case for the previous Argentine program.

So, it's not something special that we're doing for Argentina. We do this in all cases of exceptional access programs and the whole idea is to help us to continue to learn and improve on program design as we go forward. Raphael and Mariano asked about that and they are correct in that we are undertaking an ex-post evaluation and it will be presented to our executive board as always for discussion.

It will then be published as always in full on the exact timing of it, which Raphael was asking about. I don't have the exact timing of that report but will update you when we have more clarity. I think that has answered all questions but if there's a follow up on Argentina, I'll take and then move on. Okay Raphael, go ahead.

QUESTIONER: Are we supposed to expect an Article IV meeting with Argentina before the new agreement? Is that something that has to happen or that could be avoided?

MR. RICE: Yeah, I'm not sure of the status of the next Article IV discussions, Raphael. But as I said, what's happening at the moment are very frequent and strong engagement on the discussions towards a potential new program. Again, don't have any timing for you on when that might conclude but it's a very frequent active strong set of discussions that are taking place on an ongoing basis right now. That's where we are.

MR. MARTIN: Gerry hey, it's Eric Martin with Bloomberg News.

MR. RICE: Hello, Eric.

MR. MARTIN: Good morning. I also have a follow up which is that Argentine authorities have said that, and I believe President Fernandez and then possibly some aides to President Fernandez have said that the bill that will be considered in Argentina's congress which will have a multi-year economic plan will include initial understandings with the IMF. Does that mean that the Fund is looking by the start of debate in Argentine congress in early December to agree to a certain baseline or forecast? Or what would be the initial understandings with Argentina be before they would have that legislative debate?

MR. RICE: Yeah again, Eric, I don't have anything for you really on the timing of when the discussions might conclude. They are ongoing as I've said. And as I also said previously, the way I would characterize it is that we continue to work with the Argentine authorities toward reaching full understandings on a comprehensive plan that can address Argentina's pressing economic and social challenges.

I'm going to leave it there in terms of my characterization of where we are. Let me move on then to any other questions that may be online. I see Matthew, I see you there. I know you've been running around from different meetings. Let me take your questions and you can run off as needed.

QUESTIONER: Thanks a lot. I wanted to ask about Myanmar. I know I had asked in our last briefing about these reports that since the military coup, there haven't been any reports of how the funds that the IMF gave just before the coup have been used. I wanted to know if you had any update on where the money went and what steps the IMF is taking to find that out. And also, you know, impacts on FDI et cetera, just anything on Myanmar.

And I saw that there was a visit to South Sudan. I didn't see the details of it. Is there some kind of a read out on the possible program or whatever, I'd appreciate it. Thanks a lot.

MR. RICE: Thank you very much, Matthew, nice to see you up there in New York. On Myanmar, responding to your question, like many of our member countries, Myanmar received emergency assistance from the IMF in the previous year. Aimed at helping with the extraordinary economic shock posed by the COVID-19 pandemic.

You know, monies are fungible. It's always difficult to say how one part of a government's borrowing is used. However, what I can tell you is that the regime in effective control of Myanmar has recently begun to publish data on COVID related spending. And moreover, according to official reporting, there has been a substantial initial investment in vaccines this year which, of course, is encouraging.

Looking ahead, it’s critical that there is efficient distribution of vaccines, adequate non-vaccine health investments, and broader support to the most vulnerable people, and just as a reminder, you know this, Matthew, but others who don’t follow it so closely -- just as a reminder, the Fund is not currently engaged with the new regime because there’s a lack of clarity regarding whether the international community recognizes this regime as the government of Myanmar, so that’s the status of that.

On Sudan, your question, Matthew, I did talk about this a couple of weeks ago. We are clearly monitoring developments carefully, still a bit premature to comment on the implications of the recent events which we’re aware of in Sudan and how they might affect the IMF’s relationship with Sudan.

We again, just as background, Sudan had an extended credit facility arrangement with the IMF which had been approved last summer, in June, and disbursements under that arrangement will be conditional on the Board’s completion of the review, again standard practice at the Fund, or Board, will make the decision on completion of that review which we expect in the early part of next year.

Perhaps just to add, of course Sudan had been on the path toward debt relief under the highly indebted initiative for the poorest countries, and as you know, HIPC is a milestone-based process, once all necessary conditions are met, Sudan would be eligible to reach the HIPC completion point, however again given recent ongoing developments, it’s too early to say if the momentum toward that HIPC completion point will be implemented -- well, sorry, would be impacted and how it would be impacted by recent developments. That’s what I have on both of those countries, Matthew.

QUESTIONER: I’m sorry if I wasn’t clear, and not -- and that’s very appreciated on (inaudible). I was asking about South Sudan. I think I saw a picture of Mr. Selassie (phonetic) and some kind of a delegation visiting Juba. So, I mean, maybe you can send it to me later. I just wanted to ask that, and just to nail one thing down on Myanmar, are you saying that the government -- I understand you’re saying that you don’t -- in terms of the recognition, that hasn’t taken place, but you seem to be offering praise, and is it the IMF’s position that the new government is complying with commitments to transparency that have been made by the Aung San Suu Kyi, (phonetic) previous government that was overthrown, or is that not what the comparison that you made?

MR. RICE: Yes, I was just -- I wouldn’t say -- I wouldn’t characterize it as offering praise, Matthew. I was just simply stating the facts as we have them, and the information that we have. That’s all. So no more to read into then what I stated. That’s the information we have, and sorry I misheard you on Sudan.

Indeed Abe Selassie was in Juba the last few days having discussions. I do not have a readout for you. We did put out a little bit on social media yesterday. You probably saw that, and that’s what you’re referring to, but I don’t have a readout yet on his visit, but we will try and get something to you as we can. Thanks.

Let me -- I see questions online, but before I turn to them, if colleagues on screen have any questions, Eric?

QUESTIONER: Yes, Gerry, sorry, just to get myself

there. I wanted to ask you about the status of the EFF talks with El Salvador. Finance Ministers Zelaya (phonetic) says the IMF has requested an adjustment of 4 percent GDP which is 2.6 percent in spending, 1.4 percent in revenue in order to secure the $1.3 billion program. Is this a sign that a program with El Salvador is near?

MR. RICE: Thank you, Eric. I’m seeing that Rodrigo Campos of Reuters also asking on El Salvador, so let me just read Rodrigo’s question: Can you please update on negotiations that took place last week and was supposed to keep going through the end of the month? This is an article four visit, but has a program being discussed and it's still the same program discussed back in April. Eric, it's a similar themes to your question, so let me take them both and give you what I have in terms of the status of discussions with El Salvador.

What I can tell you is that some -- about a week ago on November 8th, the IMF team resumed the Article IV consultations/discussions with a delegation from El Salvador that was in-person, so the meetings kickstarted in Washington on that date, and they’ve continued virtually since then. We expect them to go on through the end of this month and cover a technical grant to make a full assessment of the economy at this point and its prospects, so very much as is always the case with an Article IV consultation, and again that will conclude with our Executive Board discussion of the staff’s recommended assessment and policies, again in supporting inclusive growth, fiscal sustainability, and financial stability.

We would expect, you know, normally the timeline here can be anywhere, you know, between six to eight weeks, again for normal, before Board would make that final assessment of the Article IV discussion, so you can expect communication from us in the period ahead at the end of two milestones after the staff mission completes -- that’s the staff completing statement familiar to those of you who follow us, and then at the end of the Executive Board discussion, and I gave broadly the timing on that.

Now, on the question of what’s being discussed, again, just to be clear, this is an Article IV discussion and the dialog will be around policies that could potentially underpin an IMF program with El Salvador taking place as part of that broader discussion on the Article IV, but right now, the discussion is the Article IV consultation. I hope that’s clear on El Salvador.

I am looking -- thank you for that question, Eric and Rodrigo. I’m looking online if there’s anyone else would like to raise their hand, Andrea? I don’t know if you are here. I took your name in vain at the beginning of the briefing, did you hear that?

QUESTIONER: I didn’t, but they told me. Thank you, Gerry. We’re looking forward to it; it’s going to be great. I just wanted to follow up on the Argentina question and I’ve got a few others. Argentina: Is there anything to substantive that you can say? I mean, you know, about what will be in this package or anything further that you can say about Argentina and those discussions.

MR. RICE: Okay. Anything else, Andrea, or is that it?

QUESTIONER: No, no, actually there’s a few more. So you put up something on Zimbabwe the other day which makes clear that Zimbabwe has unsustainable debt, but I understand that Zimbabwe is not eligible for the DSSI because they already currently have arrears which also means they are not eligible for the Common Framework, and so I wonder if you can say a word about what options there are for Zimbabwe and if there’s any possibility of allowing them to come and ask for assistance under the Common Framework program --

MR. RICE: Okay.

QUESTIONER: -- which I guess is sort of like, you know, how HIPC makes it -- you know, whether there’s some sort of HIPC-like treatment that would be possible; you know, could you defend the Common Framework? And then the other question is on Sudan, you know, there was skepticism about this Finance Minister in Sudan, Jibril Ibrahim, before he was installed which was sort of an impediment to -- for the failure to have him put in place was kind of an impediment to moving forward on the debt forgiveness track on the HIPC track.

When he was then put in place, he met with Kristalina and others, U.S. officials, and everyone sort of got onboard, but now people are saying that he was, you know, misrepresenting himself in his allegiance, you know, to the military has been problematic. I mean, is there any sense of regret about moving forward with the HIPC process on Sudan?

MR. RICE: Okay. Hey, thanks, Andrea. So your three questions: On Argentina, I really don’t have much to add to what I’ve said. The discussions are frequent, they are strong. It’s very active. I don’t want to preempt in any way those discussions, and again, I characterized it as those discussions working toward reaching full understandings on a comprehensive plan, and, you know, the big goals, Andrea, economic stability, tackling high inflation, Argentina like most other countries dealing with the pandemic, protecting the vulnerable, these are all, for sure, elements of those discussions, but I don’t really have much more -- well, I don’t have any more in terms of the detail there.

Now, on Sudan, and you might have heard me earlier, I don’t know if you did respond to Matthew, though I misheard Matthew, he was talking about South Sedan. But I did talk about Sudan, so I won’t repeat all of that, and the bottom-line is we are monitoring developments carefully and that includes any implications for the program review, the program that we have ongoing with Sudan, and for the HIPC. Just on the HIPC, Andrea, I think you know this, but as I said earlier, it’s a milestone-based process, so, you know, we look for one year -- I mean, it’s very clear what we look for.

We look for one year of satisfactory implementation of a full poverty reduction strategy. We look for demonstrated strong policy implementation, and the maintenance of macroeconomic stability, and so on, and the implementation of the so-called HIPC completion point triggers, so those are all standard procedure; that’s what we would be looking for on the HIPC.

And on the program, as I said, the staff and the Board will be looking at that first review we expect early part of 2022, but right now, it’s too early to tell how it’s all going to be impacted. That’s really what I would say on your question about Sudan.

On Zimbabwe, you are well informed, Andrea. Zimbabwe is currently not eligible to make a request for debt relief under the Common Framework because of its arrears to the World Bank. Once the conditions for international reengagement are in place and arrears to the Bank, the World Bank, are resolved, what I can tell you is we believe the Common Framework could be a useful option to address Zimbabwe's debt difficulties and of course for its part, the international community requires improvements also in domestic political conditions and economic policies to initiate reengagement with Zimbabwe.

Look, as you mentioned, Andrea, just yesterday, and I'm just looking at it, we issued a very detailed statement at the conclusion of our Article IV covering lots of these issues, so I'm going to refer you and others to that for any more information. That's what I have on Zimbabwe.

QUESTIONER: I forgot I had one more quick question if I may. It's the topical here in the U.S., the gas prices and inflation, and I don't know if someone else has already asked this question, but, you know, what is your -- have you taken a look at yet this initiative by the U.S. to encourage other countries, notably China and Japan, to release reserves to address inflation? Does the IMF have a view on -- updated view on inflation in the U.S. and whether this measure could help reduce inflation and the rise in energy prices worldwide?

MR. RICE: Yeah, thanks, Andrea. I will take -- I will take your questions and I'm taking note, but I want to be polite and I saw that Delphine had her hand raised, so let me see if Delphine's got a question, and Andrea, I'll come back to your inflation question. Delphine? I think you may be mute, Delphine. Still not hearing you, I'm afraid. No, not yet. Try one more -- try one more time. Maybe you want to put your question, if we can't reach you, unfortunately, you might want to put your question -- just send it online and we'll take it that way. On -- let me take, in the meantime, let me take Andrea's question about inflation. Clearly inflation pressures, we're all seeing it, have increased in most economies. Some of this was anticipated, but in some parts there are signs that inflation has become more broad-based and supply-demand mismatches have persisted longer than expected. Commodity prices have also increased significantly over the past year, driving headline inflation higher. We've also seen bad weather in some places affecting agricultural productivity and adding to pressure on food prices, which have been especially severe for many developing countries. So, I'm speaking here broadly and globally on inflation. Looking ahead we expect that supply-demand imbalances will wane next year and that this will help ease inflation pressures. It's also important to note that inflation expectations generally remain anchored in most economies, but if supply disruptions continue or inflation expectations become de-anchored, inflation may become more sticky. So with this in mind, Central Banks should stay vigilant to inflationary pressures. As we have seen in some economies around the world, clear signaling and a preemptive stance may be needed for upside risks to inflation and materialize clearly at the Fund. We're paying close attention, thinking through various scenarios on monetary and fiscal policy in advanced economies and possible spillover impacts on emerging and developing economies. Andrea talked about gas prices, and they of course have increased to record levels in some places, and again, our expectation is the energy crisis would revert to more normal levels in the course of next year when heating demand ebbs and supplies adjust. I don't have a comment on the recent news reports of the U.S. Administration's initiative. Andrea, on U.S. inflations, as I was talking about inflation broadly, you asked about U.S. inflation, and again, we expect inflation in the U.S. to move down in the course of 2022. Nonetheless, inflation risks are to the upside, and as we have highlighted in our most recent Article IV, will require vigilance, since continued high levels of U.S. inflation may necessitate a more front-loaded policy response, which would pose a systemic downside for both the U.S. and the global economy. So, that's it, and that's it on inflation, Andrea, and that's it for questions from you, Andrea, because that's been quite a few, and we look forward to the Reuters next event that we're going to have with you in the very near future.

I'm going to turn to Delphine. Delphine, are you having any luck? Do you want to try one more time? I'm seeing your question, but I want to give you the opportunity to speak, if you can. I am -- I am not hearing you, unfortunately, Delphine, but I do see your question and I can look you in the eye as I answer it. Delphine's question is, can you update the situation on Tunisia, please? Has the IMF resumed discussions? Any plans to go there to meet with the authorities? Thank you very much, Delphine.

On Tunisia, our head of -- our Director for the Middle East, Jihad Azour, spoke about this the other day and I'll just kind of refer to what Jihad said. But, Delphine, we have recently received from Tunisia, from the authorities, a request for a new IMF-supported program, and we've always been and will continue to be a strong partner of Tunisia. So, where we are, and again, I'm just echoing what Jihad Azour said the other day. Technical discussions between the IMF and the Tunisian authorities are underway to consider launching a new financing program for Tunisia from the IMF. Technical discussions are focusing on defining Tunisia's priorities, economic priorities. The challenge is to be met and the reforms to be implemented to overcome the crisis that the country's facing. So, that's where we are. We look forward to these ongoing discussions with the new authorities and on their policy priorities and economic reform program, with a view to a potential IMF financing arrangement with Tunisia as those discussions would proceed. That's where we are on Tunisia.

Delphine, I'm seeing a question on Ukraine from Jaroslav Dovkabol (phonetic) of Ukrinform, which is the national news agency of Ukraine, and he's asking, when will the IMF's Board consider the first review of the IMF's financial arrangement with Ukraine? Can you confirm the day, and is this the last stage before Ukraine is going to receive the next disbursement?

I can confirm, Jaroslav, that it -- this discussion with the Board that you're asking about on Ukraine will take place this coming Monday, November the 22nd, and contingent on our Board discussion, then next steps on the disbursement would indeed be taken, but contingent on our Board discussion.

That's all I have online. I'm coming back in the room one more time if anyone has a further question. I think I'm seeing Lalit join us. Lalit Jah?

QUESTIONER: Yeah, hi, and thank you. Thank you for doing this. Wanted to ask you about the discussions that are going on in India about cryptocurrency that (inaudible) discussion in the cabinet. The Central Bank Governor has made some comment and the Prime Minister today said that he is asking democracies to ensure that cryptocurrencies like Bitcoin do not end up in the wrong hands. He's asking democracies to coordinate on cryptocurrency as well. What is IMF's take on it, and what would honest advice to India as forming policies on cryptocurrencies?

MR. RICE: Thank you, Lalit. I don't really have any comments on the recent statements from the authorities that you mentioned, the statements from the Indian authorities. But in general, on crypto assets, so not necessarily India-specific, but in general, we've said a number of things that crypto assets present risks to different aspects of a financial system, including its operational stability, financial integrity, investor protection, and indeed, environmental aspects as well. Thus far, we have not found financial stability risks to be systemic at the global level, but risks are building up and should be closely monitored. Policy makers should monitor this rapidly evolving crypto landscape by developing data standards and reinforcing reporting requirements. So, again, we've said all this in terms of a general stance on this issue. National regulators should prioritize the implementation of these global standards, and by that, I'm referring to standards that have been set by the Financial Action Task Force and the Financial Stability Board, and where standards have not yet been developed, regulators must rely on and complement existing tools to control risks, especially in wallets and exchanges and financial institutions' exposures. National regulators should also enhance cross-border coordination of supervision and enforcement actions given the cross-border dimension of crypto assets. International coordination is key to prevent and minimize potential leakages of domestic policies and cross-border regulatory arbitrage. So, again, Lalit, I don't have a specific comment on recent statements and developments in India, but broadly, that's what we've been saying on crypto assets. And I know you know this, but just to make clear, of course, crypto assets are very different from Central Bank digital currencies, and this is a topic, again, which we have -- on which we've communicated at some length, including in recent times and during the annual meetings where we actually published quite a good deal of material on that. So, I hope that's helpful, Lalit. Thank you very much for the question.

I am going to leave it there for the day. I want to thank you all for tuning in on screen. Great to see you. And coming in online as well. I hope everyone can stay safe and well, and looking forward to seeing you in a couple of weeks' time. Thanks, everybody. Bye-bye.

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