Transcript

Transcript of a Press Briefing By Masood Ahmed, Director of External Relations Department, IMF

July 20, 2006

MR. AHMED: Good morning, I am Masood Ahmed, and this is our regular press briefing, embargoed as usual until 11:00 a.m. Washington time, that is, 15:00 GMT.

I just have a couple of announcements before we turn to any questions. First, I would like to draw your attention to a speech the Managing Director is going to make on the 31st of July here in Washington. This will focus on the Fund's role in low income countries. I think we will have Media Relations give you information on the speech closer to the date.

Second, in early August, the Managing Director will be traveling to Japan as part of his consultations on the MTS. I would like to remind you of that.

Finally, there is an economic forum here today on development which you are invited to come to at 11:00. Again, if you haven't got information on it, we will be happy to give it to you.

Let me know see who has questions, and again let me invite people in the Media Briefing Center to send comments online. Please identify who you are.

QUESTIONER: Sir, do you have a board date for the second and third reviews of Turkey's program?

MR. AHMED: Yes, the board date for the third and fourth reviews of Turkey's program is July 28th.

QUESTIONER: If it is approved, is it going to be something like just $1.9 billion?

MR. AHMED: I don't have the exact amount in my head, but I will come back to you and let you have that before the end of this briefing.

QUESTIONER: Okay, the 28th.

QUESTIONER: I have a question regarding the Article IV statement that was issued yesterday on Bolivia. At the end of the statement, it is noted here the problems that could occur with the prospect of an erosion of preferential access to important markets. I imagine the members of the board were referring to the access to the U.S. market with the end of the Andean Trade Preference Act. So I wonder if you could give us a sense of what would be the impact for Bolivia of the end of that access to the United States.

MR. AHMED: I won't give you an assessment now beyond what was in that statement, but again that is an issue which we will happy to come back with a more detailed assessment and put out if people are interested.

Any other questions?

QUESTIONER: Last week, the Bank of England came out with its financial stability report talking about international current account imbalances and in a worst case scenario, how the U.S. dollar could potentially depreciate as much as 30 percent. Late last month, the Bank for International Settlements relativized the risk of the unwinding of the current account imbalances, implying that perhaps central bankers have been making too big a deal out of this. I am wondering how the IMF reconciles those two messages.

MR. AHMED: I think our view on the global imbalances is now well articulated in many places. It has been articulated in the WEO. It has been articulated in what the Managing Director has said on a number of occasions. What we have said is that it is important for the world community to come together and find a way to address and to develop a strategy for containing and managing these imbalances, and that is why we have launched, as you know, the multilateral consultation which is focused on how to narrow these imbalances while maintaining robust global growth. So, I don't think that our view on this has changed at all.

QUESTIONER: On Mexico, are you at all concerned that this political uncertainty will have an impact on the economic situation there? Do you see that happening?

MR. AHMED: What we have said on Mexico is it has robust fundamentals, and we, like others, are hoping that this process will come to a closure soon, but our expectations have been that those fundamentals are and remain robust.

QUESTIONER: I just wanted to ask a question, I guess, more on personnel matters. What is the status of John Lipsky's coming to the Fund? Has he started here yet? His term doesn't begin until September, but how is the transformation working?

MR. AHMED: Mr. Lipsky will be taking over his new responsibilities as First Deputy Managing Director on September 1. He has now started here in a transition phase, simply to familiarize himself with the work of the Fund and with the ongoing issues. So, he is, if you like, in the building, but he is going to take over his responsibilities on September 1.

QUESTIONER: Does the IMF have an estimate of the impact of the crisis between Israel and Lebanon on the regional economy and on the global economy due to the oil crisis?

MR. AHMED: Well, the first thing I should say is the crisis is still underway, and it is a bit premature for us to make an assessment of the impact because we don't yet know the duration or the full depth of the crisis.

What we look at and what we can is that the impact so far on both the oil markets and on financial markets globally has been limited, but what is also clear is that the consequence of this in terms of the costs of economic reconstruction in Lebanon itself will be quite substantial, although again we don't yet have an assessment of what those costs will be precisely, and there is obviously also a humanitarian cost.

QUESTIONER: To follow up on that, has the IMF considered any kind of assistance to Lebanon, or is there a program with Lebanon now?

MR. AHMED: Again, we haven't yet gotten to the point of considering assistance to Lebanon because it is in the middle of this crisis. Lebanon is a member of the IMF. When there is a point at which we are able to provide assistance, I am sure we will look at that in the same as we would look at any other country facing that issue.

It is very quiet today. No questions? Yes?

QUESTIONER: [off mic] Could you change the embargo time?

MR. AHMED: I think what we would like to do is have a standard embargo time because it just makes it easier for people who are following this on the NBC to stay with that. Unless it poses a major problem for you, my preference would be to just stick with that 11:00 embargo time as a routine.

QUESTIONER: Does the IMF have a comment or is it heartened by the fact that there will be a further meeting in Geneva next week by major trading nations?

MR. AHMED: The IMF has said, and as I said at my last press briefing, that we think it is very important to bring this round to a successful conclusion because we believe that a rule-based and open international trading system is in the best interest of all countries. So, whatever can be done to achieve that, whatever facilitates that, we welcome, and in that context, we hope that the meeting that you have just referred to will be part of that process.

If there are no further questions, thank you very much.

Our next press briefing, just to give you a date for that before we leave -- sorry, I should have done that -- is going to be on August the 3rd. So, we look forward to seeing you on August the 3rd.

QUESTIONER: [off mic] When does the board go for recess?

MR. AHMED: The board recess begins in the week after August the 3rd.

Thank you very much.