Transcript of IMF Press Briefing
IMF News, May 19, 2022
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- Published: May 19, 2022
Overview and immediate priorities
- Date: May 19, 2022
- Speaker: Gerry Rice, Communications Department
- Key institutional actions:
- IMF and six other international institutions published a joint-action plan to address the crisis of food security; IMF contributions include policy advice, capacity development, and financial support.
- Managing Director Kristalina Georgieva at the G7 Meeting in Borne, Germany; will meet African Ministers of Finance and Agriculture at the African Development Bank and African Union on the African Union’s commissions initiative and looming food security crisis in Africa.
- World Economic Forum Annual Meeting (Davos) next week: Kristalina Georgieva and First Deputy Managing Director Gita Gopinath will participate in panels on the global economic outlook, digital currencies, fragmentation in the global economy, global debt, and other issues.
- Deputy Managing Director Bo Li will be at the Pacific Technical Assistance Center steering committee meeting in Fiji next week and will give a keynote speech.
Ukraine — financing and policy engagement
- Emergency financing and administered account:
- The IMF dispersed $1.4 billion in emergency financing to Ukraine (disbursed in March).
- An administered account was established to allow donors to channel further loans or grants to Ukraine using IMF fiduciary infrastructure.
- Canada has pledged a billion in its forthcoming budget; no other pledges or commitments were reported at the time of the briefing.
- Engagement and policy advice:
- IMF staff engaged with Ukrainian authorities on an almost daily basis since the start of Russia’s invasion of Ukraine.
- On the exchange rate of the hryvnia: no specific advice about adjustment was reported.
Argentina — first review of the program
- Status and process:
- IMF team working virtually with Minister Guzman and technical team toward the first review of the program; teams are assessing the impact of the war in Ukraine on Argentina’s economic outlook and prioritizing policies as needed.
- Gerry Rice characterized the status as “good progress being made” and noted the IMF hopes to communicate about the conclusion of the mission soon.
- Program objectives and targets:
- “The program’s objectives and targets remain unchanged.” The authorities remain committed to implementation; discussions focus on prioritizing policies to ensure agreed targets can be met.
- No timeline was provided for formal completion of the review during the briefing.
Sri Lanka, Egypt, and Ghana — program status and engagement
- Sri Lanka:
- IMF concerned about the economic crisis and hardships for the population.
- An IMF virtual staff mission is engaged in technical discussions on the authorities’ request for an IMF-supported program and was expected to continue through May 24.
- IMF remains committed to help Sri Lanka in line with IMF policies.
- Egypt:
- Egyptian authorities have requested IMF support to implement a comprehensive economic program.
- IMF staff working closely with authorities to prepare for program discussions aimed at economic stability and sustainable, job-rich, inclusive medium-term growth.
- Ghana:
- Authorities have made no program request and none is expected.
- IMF maintains close technical and policy dialogue with the government and the Bank of Ghana and stands ready to help if requested.
- Public debt is reported as exceeding 80 percent of GDP; IMF noted the need to put Ghana’s budget back on track this year and in coming years to maintain debt sustainability.
Food security, debt, and IMF responses
- IMF role in response to the food crisis:
- Activities grouped into policy advice, capacity development, and financial support.
- Focus on identifying countries facing pronounced financing pressures (especially fragile and conflict-affected states), advising on macroeconomic frameworks, strengthening social safety nets to protect vulnerable households from hunger, and identifying ways to safeguard food security without resorting to export restrictions.
- Examples and instruments:
- Augmented IMF support for Moldova and support for Mozambique include a focus on strengthening social safety nets.
- The Resilience and Sustainability Trust (RST) is coming online to provide affordable, longer-term financing for countries facing structural challenges.
- IMF intensifying efforts with the World Bank and others to support debt restructurings and calling for substantial strengthening of the G20 Common Framework for debt treatment.
SDR basket review and Renminbi (RMB) internationalization
- SDR weight adjustments (periodic review using formula based on trade and financial variables):
- U.S. dollar: rose from 41.73 to 43.38 percent.
- Chinese Renminbi: rose from 10.92 to 12.28 percent.
- Some other currencies (British Pound, Japanese Yen) declined slightly.
- Remarks on RMB internationalization:
- China’s average share in global trade for 2017 to 21 (the 5-year period relevant for the SDR review) was 12 percent.
- China’s share in global foreign exchange market turnover in 2019 was 2.2 percent.
- IMF noted differences reflect, among other things, that China’s capital account remains fairly closed.
Lebanon, Tunisia, and El Salvador — program developments
- Lebanon:
- On April 7, IMF staff and Lebanese authorities reached a staff-level agreement on comprehensive economic policies that could be supported by an Extended Fund Arrangement, subject to prior actions.
- Financing support on highly concessional terms from international partners will be essential; broad political support needed to implement comprehensive reforms to restore macroeconomic stability, debt sustainability, and financial sector solvency.
- Tunisia:
- Technical discussions with authorities ongoing since the beginning of the year; monitoring evolving political and economic developments.
- IMF emphasized that decisive actions and implementation of reforms should not wait for the conclusion of discussions or an IMF program; a homegrown reform program would strengthen ownership and credibility.
- El Salvador:
- IMF staff and authorities continue regular discussions on issues emphasized by the IMF Executive Board in January, including the pace and composition of fiscal consolidation, supporting growth and vulnerable populations, and minimizing risks arising from adopting Bitcoin as legal tender.
- IMF has made its views clear on Bitcoin as legal tender and is providing technical assistance for compilation of statistics on Bitcoin use and related information; discussions also cover anti-money laundering, fiscal transparency, accountability in public funds, and strengthening anti-corruption frameworks.
Sub-Saharan Africa and drought response
- IMF engagement with Sub-Saharan Africa:
- During the pandemic IMF emergency financing for Sub-Saharan Africa was more than 13 times the average annual lending to the region (emergency financing often with lower conditionality).
- IMF support has included SDR allocations and use of the catastrophe containment and relief trust to provide direct debt relief for many countries.
- IMF supports channeling more SDR holdings to Sub-Saharan Africa and is working on operationalizing the RST.
- IMF is calling for a strengthened G20 Common Framework for debt treatments and efforts to progress on cases already applying under the framework (Chad, Ethiopia, Zambia).
- Drought in the Horn of Africa:
- Recognized as a matter of grave concern and part of the broader food security response; no additional specific measures were announced in the briefing.
Transcript of IMF Press Briefing — May 19, 2022. IMF Communications Department.