Transcript of IMF Press Briefing

IMF News, November 1, 2018

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Annual Research Conference kicked off; topic: international spillovers and cooperation; led by First Deputy Managing Director David Lipton; final Research Conference led by Maury Obstfeld before retirement; successor: Gita Gopinath joining at the beginning of the New Year.
Managing Director Christine Lagarde travel and public engagements:
- November 5: China International Import Expo, Shanghai; speaking at opening ceremony along with President Xi.
- November 6: 1+6 Roundtable discussions in Beijing; press conference after the discussion.
- November 7: New Economy Forum in Singapore hosted by Bloomberg.
- November 11: Peace Forum in Paris to commemorate the 100 year commemoration of the end of World War I; 60 heads of state and 10 heads of international institutions attending.
Regional and forum events:
- November 8: Launch of Regional Economic Outlook for Europe in Copenhagen; joint event with the Danish Central Bank; led by Poul Thomsen and Governor Per Callesen.
- November 19-20: Sixth Global Statistical Forum at the Fund on measuring economic welfare in the digital age; keynote speaker Jim Balsillie.

Re-imposition of U.S. sanctions on Iran:
- Expected economic impact: will reduce economic growth by restricting Iran's oil exports.
- IMF advice to Iran: implement policies to safeguard macro stability and protect the most vulnerable groups.
Financial integrity and AML-CFT:
- IMF urged Iranian authorities to strengthen and effectively implement their AML-CFT framework in line with international standards ahead of the February 20, '19 meeting of the FATF deadline.
- IMF provides technical assistance to many members on AML-CFT matters and is following developments closely.
Oil market implications: IMF referenced prior discussion in the World Economic Outlook but had no additional assessment in this briefing.

Institutional stance:
- IMF focuses on economic implications of sanctions rather than political judgments.
- The Fund analyzes potential economic impacts and advises on steps countries might take in response to sanctions.
Monitoring:
- IMF follows developments closely and provides analysis and technical assistance where relevant.

Timeline and process:
- October 11: Pakistan's Finance Minister made a formal request for financial assistance during the Annual Meetings in Indonesia.
- November 7: IMF staff mission expected to begin discussions in Islamabad to initiate the program dialogue.
- Program objectives (as stated): help stabilize the Pakistan economy, put in place the preconditions for sustained inclusive growth.
- Next steps: modalities announced once a staff level agreement is reached; Board consideration contingent on staff level agreement and the usual communications (press release, etc.) would follow.

Program status:
- IMF completed the first review of Argentina's 36-month standby arrangement; allowed disbursement of about $5.7 billion.
- Board approved an augmentation increasing the loan amount to a $56.3 billion.
Policy content and priorities:
- Program aims to strengthen Argentina's economic plan, bolster confidence, stabilize the economy by reducing the budget deficit, adopting a simpler monetary policy framework, and a freely floating exchange rate.
- Protection for the most vulnerable groups is central; the augmented arrangement prioritizes social assistance spending and plans for an increase in spending on social assistance programs if social conditions deteriorate.
Implementation:
- Next staff mission to Buenos Aires expected in the coming weeks.
- IMF emphasizes that the key now is steady implementation of agreed policies, supported by the international community.

Buyback question:
- Liability management decisions, including buybacks, are prerogatives of the Greek authorities; IMF does not have detailed commentary on specific discussions.
- Greece in a stronger position following European Partners' decision on additional debt relief and the buildup of a large cash buffer supported by the final ESM disbursement.
Post-program and pension reform:
- IMF no longer has a financial arrangement with Greece but remains involved in surveillance and technical engagement.
- IMF view: implementation of the 2019-2020 pre-legislative package, including pension measures agreed earlier, is important to free up fiscal space for non-retiree social spending and help reduce the tax burden.
Managing Director's visit:
- No confirmed date for a Managing Director visit to Greece; IMF eager to find an appropriate time.

General principle:
- IMF supports clear lines of responsibility and accountability; international best practice is no government or industry interference that compromises the independence of the central bank and financial supervisor.
Monitoring:
- IMF is monitoring developments in India (and other countries) regarding central bank-government relations and emphasizes the importance of central bank independence.

Status:
- Staff level agreement reached on the fourth review of IMF support for Egypt's economic program; press release issued.
- No Board date provided at the time of the briefing; IMF will announce Board timing when available.

Venezuela:
- IMF not in active discussions with Venezuelan authorities; no specific IMF assessment provided on potential sanctions (such as those related to gold sales).
Yemen:
- IMF expressed concern about the humanitarian situation and economic costs of the conflict.
- IMF working with donors; believes donor grants would be needed.
- Stressed importance of cooperation within the revamped central bank system to facilitate imports and maintain basic public services.
- IMF role currently limited given the armed conflict and humanitarian situation; stands ready to reengage to restore macro stability, build institutional capacity, and jumpstart growth once conflict is resolved.
Saudi Arabia and the Khashoggi matter:
- Too early to determine economic impact; dependent on effects on confidence, business investment, and decisions.
- At that time, effects appeared economically relatively modest.

IMF is monitoring reported developments regarding the installation of Mr. Rajapaksa as prime minister and remains in contact with technical counterparts.
No assessment provided on potential program implications at the time of the briefing.

Transcript of IMF Press Briefing, November 1, 2018.