Transcript of IMF Press Briefing (March 11, 2021)

IMF News, March 11, 2021

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Published: March 11, 2021

Overview

Press briefing delivered by Gerry Rice, Communications Department, International Monetary Fund.
Briefing embargoed until 10:30 a.m. Washington time.
Announcements of upcoming IMF events:
- Staff paper on rising corporate market power to be released Monday (joint event with Brookings Institution).
- Managing Director Kristalina Georgieva participating in Curtain Raiser speech at the Council on Foreign Relations on March 30th.
- World Economic Outlook release scheduled for April 6th.
- Conversation between Kristalina Georgieva and Brad Smith on March 18th.
- Deputy Managing Director Geoffrey Okamoto participating at China Development Forum on March 20th.

China and Green Development

IMF observations on China’s “two sessions” and five-year plan:
- China reconfirms goal of carbon neutrality by 2060.
- IMF welcomes greater focus on quality rather than quantity of growth and a rebalancing toward greener, more consumption-oriented growth.
- Implementation focus: investment into non-fossil fuels, continued curbing of carbon emissions and energy intensities.
IMF policy view:
- All countries need to set carbon emissions on downward paths consistent with global climate targets.
- Carbon pricing designed with an increasing trajectory scaled to meet international emissions targets can be particularly useful.
IMF growth forecast reference:
- January WEO projection for China: 8.1 percent growth for 2021.
- Comment: “above 6 percent” target mentioned by China should be easily reached given fast recovery and large base effects.

Myanmar

IMF position on engagement:
- IMF is refraining from engagement with the new regime until the views of IMF membership are clarified.
- Only low-level engagement such as fact finding is taking place during this period of uncertainty.
- IMF monitoring events closely; priority is ensuring efforts continue to combat COVID and support the most vulnerable.

Argentina

Current status of Fund engagement:
- IMF actively and constructively engaging with Argentine authorities as they prepare an economic plan that could be supported by a Fund program.
- Minister Martín Guzmán scheduled to meet IMF staff and Managing Director Kristalina Georgieva on March 23rd and 24th.
- Focus of discussions: policies to foster stability, sustainable and inclusive private-sector-led growth, and protecting Argentina’s most vulnerable people.
Judicial proceedings and IMF comment:
- IMF does not comment on judicial proceedings as a standard practice.
- IMF objective remains to help the people of Argentina; supports the notion that an IMF-supported program could strengthen the economy.
Ex-post evaluation of prior program:
- An ex-post evaluation by IMF staff of the previous exceptional access program is underway.
- Such evaluations are presented to the Executive Board, published, and made public.
- No timing for publication provided.
Surcharges:
- Surcharges are part of the Fund's risk-management framework to strengthen IMF financial capacity.
- Surcharges are paid only when a member’s outstanding credit is high and prolonged.
- Most IMF lending to low-income countries is provided under the Poverty Reduction and Growth Trust on highly concessional terms, often at zero interest and without surcharges.

Special Drawing Rights (SDRs)

G20 request:
- At the recent G20 meeting, there was broad-based support expressed for a new SDR allocation and the IMF was asked to formulate a proposal.
Process described:
- Staff will assess long-term global reserve needs and present analysis to the Executive Board.
- If approved by the Executive Board, a proposal would be submitted to the Board of Governors for final approval, which requires at least 85 percent of total IMF voting power.
Historical reference:
- 2009 SDR allocation process: G20 request in April 2009; Executive Board discussions April–June; Board of Governors approved and allocation effective in August 2009.
Transparency and accountability:
- IMF will explore ways to improve transparency and accountability relating to SDRs, including how SDRs are traded and used.
Remarks on allocation size:
- Managing Director’s remark about “500 billion” was not elaborated; IMF staff will base allocation size on assessment of reserve needs. No specifics or timing confirmed.

U.S. Rescue Package and Global Spillovers

Preliminary IMF estimate:
- Recently passed U.S. legislation would increase U.S. GDP by five to six percent over three years.
Global implications:
- Stronger U.S. demand will have positive spillovers for global growth through higher demand for commodities, goods, and services.
- Risks: exceptionally low U.S. dollar funding costs environment suggests risks of sudden tightening in financial conditions; central banks should communicate clearly on asset purchases and interest-rate policy to avoid unwarranted tightening.
- Emerging market and developing economies with financial vulnerabilities and weak trade ties to the U.S. should be ready with contingent policies for potential downside risks, including possible tightening of financial conditions.

Sri Lanka, Honduras, Ukraine

Sri Lanka:
- Extended Fund Facility approved in 2016 expired in June 2020.
- Sri Lanka requested emergency financial support in April 2020 for COVID response.
- IMF assessment of support has taken longer due to daunting economic challenges and high public debt.
- Authorities have implemented import restrictions and recently introduced requirement to convert 25 percent of export proceeds.
- IMF continues to monitor developments including Sri Lanka’s $1.5 billion currency swap with the People’s Bank of China.
Honduras:
- IMF does not comment on judicial proceedings; no substantive comment on reported allegations.
Ukraine:
- IMF monitoring the independence of the National Bank of Ukraine closely.
- Central bank independence and effectiveness of anti-corruption institutions are vital for macroeconomic stability, investor confidence, financial stability, and prerequisites under the IMF support program.

IMF Procedures and Policy Notes

Monitoring and engagement:
- IMF engagement decisions guided by membership recognition and international community views.
- IMF prioritizes support for COVID response and protection of vulnerable populations.
Communications:
- IMF encourages clear communication by central banks to manage expectations and financial conditions.
Transparency:
- IMF supports improving transparency and accountability on SDR usage and trading.

Key Dates and Figures (as stated)

Press briefing date: March 11, 2021.
Embargo time: 10:30 a.m. (Washington time).
Upcoming events and dates:
- March 18th: Kristalina Georgieva conversation with Brad Smith.
- March 20th: Geoffrey Okamoto at China Development Forum.
- March 23rd–24th: Minister Guzmán visit to IMF.
- March 30th: IMF Curtain Raiser speech at the Council on Foreign Relations.
- April 6th: World Economic Outlook release.
Numerical figures cited:
- China’s carbon neutrality goal: 2060.
- IMF January WEO China growth projection: 8.1 percent for 2021.
- China’s mentioned target: “above 6 percent”.
- IMF preliminary estimate of U.S. GDP increase from rescue package: five to six percent over three years.
- Sri Lanka currency swap: $1.5 billion.
- 2009 SDR allocation historical timeline referenced (April–August 2009).
- Board of Governors approval threshold for SDR allocation: at least 85 percent of total voting power.

Transcript of IMF Press Briefing, March 11, 2021 — International Monetary Fund

Transcript of IMF Press Briefing (March 11, 2021)

Source details

Other formats

Bibliographic details

Overview

China and Green Development

Myanmar

Argentina

Special Drawing Rights (SDRs)

U.S. Rescue Package and Global Spillovers

Sri Lanka, Honduras, Ukraine

IMF Procedures and Policy Notes

Key Dates and Figures (as stated)

References