Transcript of IMF Press Briefing
IMF News, June 10, 2021
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- Published: June 10, 2021
Announcements and upcoming events
- Briefing embargoed until 10:30 a.m. (Washington time).
- Managing Director Kristalina Georgieva will participate virtually in the G7 Leaders’ Summit.
- Andorra: joint press conference with the Finance Minister of Andorra, Èric Jover Comas, and IMF Mission Chief Srobona Mitra, marking Andorra’s first Article IV consultation since it became the 190th IMF member.
- June 15, 12:00 Washington time: high-level IMF panel on promoting an inclusive recovery, moderated by Martin Sambel (Financial Times), linked to an upcoming IMF coauthored book on achieving inclusive growth (livestreamed, open).
- June 16, 9:00 Washington time: high-level policy panel on natural disasters and climate change with Kristalina Georgieva, the Prime Minister of Barbados, and the Minister of Economy and Finance of Madagascar (livestreamed, open).
- June 18, 10:00 Washington time: event co-sponsored with the Brookings Institution on the role of an international carbon price floor; an IMF paper will be the backdrop (Managing Director participation).
El Salvador: staff engagement and Bitcoin as legal tender
- IMF staff are in discussions with El Salvadorian authorities on a requested IMF loan to support their economic program; size and details of any program are determined during staff missions.
- IMF staff will communicate at the end of the current mission (mission taking place virtually).
- On Bitcoin adoption as legal tender:
- Adoption "raises a number of macroeconomic, financial and legal issues that require very careful analysis."
- IMF is following developments closely and will continue consultations with the authorities.
- IMF team scheduled to meet with the President of El Salvador during the mission; IMF will not preempt that meeting with further comments.
Crypto assets and regulatory approach
- IMF position reiterated: crypto assets "can pose significant risks" and "effective regulatory measures are very important" when dealing with them.
- IMF works closely with other bodies (e.g., Bank for International Settlements) on digital currency issues and holds frequent discussions with relevant counterparts.
- No detailed stance was provided on token registration as securities or on a global centralized regulatory mechanism in this briefing; IMF emphasized the importance of effective regulation and continued engagement.
India and COVID-19: vaccine access and growth forecasts
- IMF "welcomes the Indian government's announcement to facilitate access to vaccinations" and additional support to minimize social costs of the pandemic.
- The second COVID-19 wave and containment measures "suggests a sharp fall in economic activity."
- IMF will be revising India's growth forecast next month in the update to the World Economic Outlook.
- India’s economic outlook has broader spillover implications through trade linkages and global supply chains, especially within South Asia.
IMF proposal to end the pandemic: targets and financing
- IMF staff put forward a coordinated strategy to end the pandemic in 2022 with specific targets:
- "40 percent of the population in every country to be vaccinated by the end of ’21"
- "60 percent of the population in every country to be vaccinated by the middle of 2022"
- Financing proposal:
- Price tag of "$50 billion" to achieve the vaccination targets.
- "The bulk of that, the vast majority of that, should come in grant form for the most vulnerable countries."
- Projected economic return:
- Estimated "in the region of nine trillion, by 2025" (economic potential/return on the $50 billion).
- IMF message to G7: urgent attention to vaccination equity and support for vulnerable countries; "until we defeat this pandemic everywhere, we do not defeat it anywhere."
Tanzania and Cameroon: emergency financing, transparency, and governance conditions
- Tanzania:
- IMF supported Tanzania last year via the Catastrophe and Containment Trust (debt relief) during the pandemic.
- Tanzania has requested access under the Rapid Credit Facility; fact-finding meetings have begun and are ongoing.
- Publication of data and audits concerning the use of COVID-19 funds is cited as "a key transparency measure" in IMF engagement with the authorities.
- Cameroon:
- IMF aware of a Cameroonian investigation into the use of emergency financing disbursements approved last year for the pandemic response.
- IMF emphasizes "the importance of good governance" and that "accountability and transparency" must not take a back seat.
- Specific measures agreed to strengthen governance and reduce corruption vulnerabilities include:
- Publication of the results of COVID-19 related public procurement.
- Publication of beneficial ownership of companies receiving procurement contracts.
- Issuance of a report on COVID-19 related spending.
- An independent audit of the spending and publication of the results.
- IMF is engaging with the authorities on these measures to support pandemic response in a transparent manner.
Lebanon: capital control law and deposit withdrawals
- IMF view: proposals to implement a capital control law and formalize deposit withdrawals "would need to be part of a broader set of policy measures and reforms" for viability and sustainability.
- IMF "doesn't see the need to implement the capital control law now, especially without the support of appropriate fiscal, monetary and exchange-rate policies."
- Concern noted: "It’s not clear how the contemplated withdrawal of deposit would be financed, given the sharp decline in the availability of foreign currency in the economy over the past two years."
- Risk highlighted: an increase in lira circulation from already very high growth rates could add to inflationary pressures and depreciation of the lira, harming living standards.
Argentina: ongoing work toward a Fund-supported program and EPE
- IMF and Argentine authorities "committed to continuing our work together on an IMF-supported program" to address social and economic challenges, aggravated by COVID-19.
- Status:
- Continued close dialogue and work toward a Fund-supported program.
- No update on timing for conclusion of discussions or on a planned Article IV mission at the time of the briefing.
- Paris Club: IMF referred questions on Paris Club communications to the Paris Club and the Argentine authorities; no IMF confirmation of Paris Club requests was provided.
- Ex-Post Evaluation (EPE) of prior exceptional-access program with Argentina:
- IMF will produce an Ex-Post Evaluation.
- No date provided for publication; IMF will publish the evaluation in its entirety when completed and emphasized the importance of objectivity and transparency.
Ukraine: standby arrangement first review and governance reforms
- IMF engagement: work toward the first review under the $5 billion standby arrangement approved by the IMF Executive Board.
- Discussions ongoing on implementing program policies and reforms; some progress made, but more is needed before completion of the first review.
- Program objectives and reform areas include:
- Strengthening governance of the National Bank.
- Improvements to the legislative and regulatory framework for bank supervision and resolution.
- Policies to reduce the medium-term fiscal deficit.
- Legislation restoring and strengthening the anti-corruption framework and the judiciary.
IMF media/press details
- Press officer: Ting Yan, Phone: +1 202 623-7100, Email: MEDIA@IMF.org
- IMF Spokesperson handle referenced: @IMFSpokesperson
IMF Communications Department — June 10, 2021