Transcript of IMF Press Briefing

IMF News, November 18, 2021

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• Published: November 18, 2021

Announcements and upcoming events

• Date of briefing: November 18, 2021.
• Press Officer: Brian Walker. Phone: +1 202 623-7100 Email: MEDIA@IMF.org @IMFSpokesperson.
• Email notification sign-up available for IMF postings.
• IMF Statistical Forum (9th) taking place virtually; theme: Measuring Climate Change: The Economic and Financial Dimensions.
  • Forum session with Managing Director Kristalina Georgieva and Professor Johan Rockstrom at 3:15 (this afternoon).
• Tuesday, November 30th: Managing Director to give introductory remarks at the 7th Richard Good lecture; presentation included from Professor Stefanie Stantcheva.
• Early December: Kristalina Georgieva participating in the Reuters NEXT summit and to be interviewed by Andrea Shalal.
• Thursday, December 2nd at 8:30: Deputy Managing Director Bo Li to deliver opening remarks for IMF panel on New Monetary Policy Tools for emerging and developing economies.
  • Panelists include Lesetja Kganyago, Elvira Nabiullina, Carmen Reinhart; moderated by Tobias Adrian.
• Monday December 6th: Kristalina Georgieva to present the Euro Area Article IV concluding statement at the Euro Group in Brussels, with anticipated press interaction thereafter.

Argentina — status of program discussions and ex-post evaluation

• IMF characterization of engagement:
  • "We continue to work towards reaching full understandings on a comprehensive plan that can durably address Argentina's most pressing economic and social challenges."
  • Aim: strengthen economic stability by tackling high inflation and protecting the most vulnerable.
  • Engagement with Argentine authorities is "active", "frequent" and "strong", but no specific timings or meeting schedules were provided.
• Ex-post evaluation of the previous Stand-By Agreement (SBA):
  • IMF practice: an ex-post evaluation is conducted for all "exceptional access programs" (the previous Argentine program was such a case).
  • Purpose: help learn and improve program design.
  • The ex-post evaluation will be presented to the IMF Executive Board for discussion and published in full; no exact timing was provided.

Article IV timing and program sequencing

• No confirmation on whether an Article IV mission must precede a new IMF agreement with Argentina; current status described as ongoing frequent engagement without timing details.
• Regarding legislative processes in Argentina (announcement of a multi-year economic plan to be discussed in Congress), IMF had no specific comment on sequencing or initial understandings relative to congressional debate.

Myanmar

• IMF context:
  • Myanmar received emergency assistance from the IMF in the prior year aimed at COVID-19 pandemic shock.
  • Funds are fungible; it is difficult to trace specific uses of government borrowing.
  • The regime in effective control has recently begun to publish data on COVID-related spending; official reporting indicates a "substantial initial investment in vaccines this year".
• IMF engagement status:
  • "The Fund is not currently engaged with the new regime because there’s a lack of clarity regarding whether the international community recognizes this regime as the government of Myanmar."

Sudan

• Background:
  • Sudan had an Extended Credit Facility arrangement approved in June (last summer).
  • Disbursements under that arrangement are conditional on the IMF Board's completion of the review; the Board decision is expected in the "early part of next year."
• HIPC process:
  • Sudan was on the path toward debt relief under the HIPC initiative; HIPC is a milestone-based process.
  • It is "too early to say" how recent developments in Sudan might affect momentum toward the HIPC completion point.
• IMF monitoring: developments are being monitored carefully to assess implications for the program review and HIPC milestones.

South Sudan

• Visit: Abe Selassie (IMF) visited Juba in the last few days.
• No detailed readout was available at the time of the briefing; a small social media post had been issued.

El Salvador

• Article IV consultations resumed with an in-person delegation on November 8th; continued virtually thereafter.
• Purpose: technical assessment of the economy and prospects; conclusion normally involves a staff statement at mission completion and an Executive Board discussion.
• Typical timeline for Article IV process: "anywhere between six to eight weeks" before Board assessment, with subsequent communication at mission completion and post-Board.
• Clarification: current engagement is an Article IV consultation; dialog may cover policies that could underpin an IMF program, but the mission is an Article IV at this stage.

Tunisia

• IMF received a request from Tunisian authorities for a new IMF-supported program.
• Technical discussions are underway to consider launching a financing program.
  • Focus: defining Tunisia's economic priorities, challenges to be met, and reforms to be implemented.
• IMF position: "we have always been and will continue to be a strong partner of Tunisia."

Zimbabwe

• Status:
  • IMF statement concluded Zimbabwe has unsustainable debt.
  • Zimbabwe is currently not eligible to request debt relief under the Common Framework because of arrears to the World Bank.
• Conditionality for reengagement:
  • Once conditions for international reengagement are in place and World Bank arrears are resolved, the IMF considers the Common Framework could be a useful option to address Zimbabwe's debt difficulties.
  • International community requires improvements in domestic political conditions and economic policies to initiate reengagement.
• Note: a detailed Article IV statement on Zimbabwe had been issued recently and was referenced for more information.

Inflation, energy prices, and monetary policy

• Observation:
  • Inflation pressures have increased in most economies; some was anticipated, but in some cases inflation has become more broad-based.
  • Commodity prices and bad weather have added to food and energy price pressures.
• Outlook:
  • IMF expectation: supply-demand imbalances will wane next year and help ease inflation pressures.
  • Inflation expectations generally remain anchored in most economies.
  • If supply disruptions continue or inflation expectations de-anchor, inflation may become more sticky.
• Policy guidance:
  • Central Banks should "stay vigilant to inflationary pressures."
  • Clear signaling and a preemptive stance may be needed where upside inflation risks materialize.
  • IMF is "paying close attention" and thinking through scenarios on monetary and fiscal policy in advanced economies and spillovers to emerging and developing economies.
• U.S. inflation:
  • Expectation stated that "inflation in the U.S. [will] move down in the course of 2022."
  • Continued high U.S. inflation could necessitate a more front-loaded policy response with systemic downside risks globally.
• No comment provided on recent news reports about the U.S. Administration’s initiative to encourage release of reserves by other countries.

Ukraine

• IMF Board discussion:
  • Board consideration of the first review of the IMF’s financial arrangement with Ukraine is scheduled for Monday, November the 22nd.
  • Contingent on the Board discussion, next steps on a disbursement would be taken.

Cryptocurrency and policy advice

• IMF general view on crypto assets:
  • Crypto assets "present risks" to operational stability, financial integrity, investor protection, and environmental aspects.
  • To date, financial stability risks are not systemic at the global level, but risks are building and warrant close monitoring.
• Policy recommendations:
  • Policymakers should develop data standards and reinforce reporting requirements to monitor the rapidly evolving crypto landscape.
  • National regulators should prioritize implementation of global standards from the Financial Action Task Force and the Financial Stability Board.
  • Where standards are not yet developed, regulators should rely on and complement existing tools to control risks (wallets, exchanges, financial institutions' exposures).
  • Enhance cross-border coordination of supervision and enforcement actions to mitigate cross-border regulatory arbitrage.
• Distinction noted: crypto assets are very different from Central Bank digital currencies; the IMF has published material and commentary on CBDCs in recent meetings.

International Monetary Fund

References

• https://www.imf.org/sitecore/service/notfound.aspx?item=master%3A%7B8D1E6EAB-2E82-47BE-B9FE-258FFB4CBC4A%7D%40en
• Sudan and the IMF
• Argentina and the IMF
• El Salvador and the IMF
• India and the IMF
• Myanmar and the IMF
• Republic of South Sudan and the IMF
• Tunisia and the IMF
• Ukraine and the IMF
• Zimbabwe and the IMF
• Transcripts
• PRESS CENTER
• https://www.imf.org/en/home