Transcript of IMF Press Briefing

IMF News, February 10, 2022

Source details

Embargo until 10:30 a.m. (Washington time) for the briefing.
Managing Director Kristalina Georgieva travel and participation:
- EU-Africa Summit in Brussels February 17 to 18.
- Munich Security Conference February 18th to 20th.
- G20 Finance Ministers and Central Bank Governors Meeting (under the chair of Indonesia) taking place over 17/18 of February; MD will participate virtually.
- Participation in the ILO's Global Forum for a Human-Centered Recovery on February the 22nd, discussing decent jobs and inclusive economic growth.
First Deputy Managing Director Gita Gopinath to participate virtually in the Finance and Central Bank Deputies Meeting on 15th and 16th of February.
IMF to publish a "G20 Surveillance Note" next week giving an update on the global economy and other issues in preparation for the G20.

Timeline and recent steps:
- On January 28th, IMF staff and the Argentine authorities "reached an understanding on key policies" as part of ongoing discussions toward an IMF-supported program.
- The understandings referenced include the fiscal path to "sustainably improve public finances and reduce monetary financing," durably reducing energy subsidies, and mobilizing external support to strengthen Argentina's resilience.
- Discussions are continuing toward a staff-level agreement; no specific timeline or mission date was provided.
- After a staff-level agreement, the program proposal would be taken to the IMF Executive Board for final decision.
Specific numeric/financial references raised in questions:
- President Alberto Fernández referenced an upcoming "$2.8 billion IMF maturity at the end of March."
IMF stance:
- Characterized the approach as "realistic, pragmatic, credible" to strengthen macroeconomic stability and address deep-seated challenges.
- No comment on alternative arrangements; focus remains on ongoing intensive consultations.

IMF engagement:
- Ongoing discussions with Lebanon described as "progressing well" but "extensive work still required."
- An ongoing mission was scheduled to end this week (relative to the briefing) and discussions with authorities will continue.
- IMF stands ready to "re-double our efforts" to help Lebanon formulate a reform program to address the economic and financial crisis.

Current program:
- IMF has a "$5 billion, 18-month standby arrangement" supporting Ukraine.
- The program was recently extended through "the end of June ’22."
- The first review was completed toward the end of last year, "unlocking about $700 million dollars" that was disbursed.
- The Board approved a schedule for the remaining two disbursements in November, with the second review mission expected to take place in "the first quarter of 2022," provided sufficient progress on program objectives.
Monitoring:
- IMF is monitoring developments "very closely" and will announce the next review mission once scheduled.

Sri Lanka engagement:
- IMF had a staff team in Colombo toward the end of last year for Article IV consultation; Board discussion expected "later this month" (relative to the briefing).
- IMF conducted a technical assistance mission to strengthen the macro fiscal unit at the Ministry of Finance, conducted virtually and concluding at the time of the briefing.
- The Government of Sri Lanka has not requested financial support from the IMF; IMF "stands ready to discuss options if requested" and continues to monitor developments.
Strengthening the Common Framework (G20 context):
- IMF recommendations to strengthen the Common Framework include:
- A sustained debt service standstill for the duration of negotiations once a country indicates willingness to participate.
- A firm timeline for completing the negotiation process for debt restructuring.
- IMF hopes to see progress on these elements at the upcoming G20 discussions.

Status:
- Tunisian authorities sent a letter to the IMF in the latter part of last year requesting a new Fund-supported program.
- IMF staff and Tunisian authorities have held technical discussions focusing on immediate economic challenges, priorities, and reforms.
Upcoming mission:
- IMF mission confirmed for February 14th to 22nd; the mission will be virtual.
- IMF will communicate main elements of the discussions at the end of that mission.

Ghana:
- IMF maintains a close policy and technical dialogue and monitors the economic recovery.
- IMF noted in last year's Article IV that "a deeper, more equitable fiscal effort is needed."
- The proposed 2022 budget "announced a 20 percent spending cut."
- The Ghanaian authorities "have not requested a financial program with the IMF" as of the briefing.
El Salvador and Bitcoin:
- IMF position reiterated: IMF supports efforts to boost financial inclusion and growth but cautions that "the risks arising from using bitcoin as legal tender need to be addressed" and require "an adequate and appropriate regulatory framework."
- The El Salvador Article IV report was discussed at the IMF Executive Board on January 24th.
- On whether continued use of bitcoin as legal tender would close the door to an IMF deal: IMF noted authorities have not yet outlined the technical and operational details, including the regulatory framework; further discussion is needed.

EU-Africa Summit: Managing Director will participate; no specific announcement detailed in the briefing.
Ethiopia:
- IMF is "monitoring that situation" and is "concerned."
- Heightened uncertainty related to conflict makes it difficult to move to program discussions or refresh macroeconomic projections at the time of the briefing.
- IMF "stands ready to engage on program discussions when the time is right."
Angola:
- IMF deferred detailed comment and offered to follow up bilaterally after the briefing.

IMF assessments and trends:
- IMF estimates "about 60 percent of low income countries are at high risk or already in debt distress."
- By comparison, "a few years ago" that number "was below 30 percent."
- The Debt Service Suspension Initiative (DSSI) "ended as of last year."
- IMF has seen progress on debt treatments in specific cases (Chad, Zambia, Ethiopia) under the Common Framework but emphasizes need to strengthen the framework.
Calls to action:
- All creditors and debtors should "play their part as fully as possible" in debt treatment processes.
- IMF advocates for measures (debt service standstills and firm timelines) to make the Common Framework more effective and to cope with potential increases in restructuring demand.

Notable enforcement/financial security event referenced in discussion: a "largest seizure ever by the U.S. Treasury $3.6 billion from the Bit finance hack" (raised during the Bitcoin discussion).
IMF reiterated readiness to support countries that request financial assistance and to provide technical assistance and capacity development as appropriate.

Source: Transcript of IMF Press Briefing, February 10, 2022.