Transcript

GFSR Press Briefing 2022 IMF Spring Meetings

April 19, 2022

Speakers:

Tobias Adrian, Financial Counselor and Director of the Monetary and Capital Markets Department

Fabio Natalucci, Deputy Director of the Monetary and Capital Markets Department

Ranjit Singh, Assistant Director of the Monetary and Capital Markets Department

Randa Elnagar, Senior Communications Officer

Ms. Nagar: Good morning, welcome to our viewers around the world to this press briefing on the release of April 2022 Global Financial Stability Report. I am Randa Elnagar, of the IMF’s communications department. Let me introduce our speakers today: Tobias Adrian, financial counsellor and director of the monetary and capital markets department, Fabio Natalucci, deputy director of the monetary and capital markets department, and Ranjit Singh, assistant Director of the monetary and capital markets department. Before taking questions, let me kick start our briefing today and turn to Tobias here and ask him a few questions.

Tobias, a lot has changed since the release of the GFSR in October. What is new this time around?

Mr. Adrian: A lot has changed since October, and the way I would put it is that the global financial system has been stress tested with two shocks. The first is a sharp increase in interest rates related to the tightening cycle of monetary policy around the world. The second is the adverse shock from the war in Ukraine, which has pushed commodity prices and food prices up and has adversely impacted supply chains further.

For now, the global financial system this year has been able to absorb both of these shocks, but there are many risks and vulnerabilities going forward, and we will certainly talk about them in a minute.

Ms. Elnagar: What is the one most important challenge that the global economy and central bankers are currently facing?

Mr. Adrian: The single most important challenge of our time right now is inflation. Inflation is well above target in the majority of countries around the world, and central banks have to act aggressively in order to bring inflation back down to target. There is a risk of de-anchoring of medium‑term inflation expectations, so at the moment we see that shorter term inflation expectations are very elevated; but then there is a gradual expectation of inflation coming back to target in most countries around the world. However, there is a risk that eventually inflation expectations could de-anchor, and there could be more of an expectation of inflation even in the medium term. Central banks have to counteract that by tightening monetary policy, slowing economic activity to bring inflation down.

Ms. Elnagar: What is your advice to policymakers?

Mr. Adrian: I would say there are four main issues on the table right now. The first is bringing inflation back to target, so tightening monetary policy. That is the number one issue. The second issue is about regulation. We still have a number of areas of priorities for regulations: One is the nonbank financial intermediation sector. We have seen in 2020 in the "dash for cash,” that there are many vulnerabilities that need to be fixed. The second one is the crypto ecosystem that needs to be regulated globally. And, finally, there are emerging vulnerabilities in the current macroeconomic environment, so macroprudential policies are the appropriate tools here.

Third, we have to create a global payments system that work together across countries where CBDCs, central bank digital currencies, are interoperable across countries; they can operate together. And we need global cooperation to get to these payments systems.

Finally, we need a transition to a greener financial system, so that means better data, better disclosures, but also climate finance and climate stress testing. So these are the four priorities on the policy agenda from a financial stability point of view.

Ms. Elnagar: Now we turn to your questions which you can submit via the online media briefing center or WebEx. For WebEx we kindly ask you to use the raise hand feature. There is something wrong with our WebEx feed here, so let me turn to the Media Briefing Center, and then we go back to WebEx.

We start with a question asking about bank holdings. Sovereign debt has increased significantly in India since the global financial crisis. What risk it poses to India’s fiscal stability. What is the IMF’s prescription to resolve it?

Mr. Adrian: Thank you for that question. In India we have seen an increase in sovereign debt as the government has deployed expansionary fiscal policies during the pandemic. We also saw an increase of holdings of banks of this sovereign debt. However, the fiscal situation in India is sustainable. Furthermore, the level of sovereign debt on the banks that we are seeing is also leaving us at comfort, so we are not alarmed at this point. Having said that, there are many other countries where we do worry about this interaction between sovereign risk and banking sector exposures, but India is not one of them. Perhaps, Ranjit, do you want to….

Mr. Singh: Thank you very much, Tobias. I think as Tobias has outlined, the situation in respect of India is certainly one that is manageable. In the context of the question, of course, the level of bank holdings of sovereign debt in India is actually at about 29 percent, and this is on average higher than the emerging market figure of 16 percent. And, of course, India’s public‑debt‑to‑GDP ratio is at about 87 percent.

In the context of the question that is being posed, I suppose with the backdrop of the tightening in global financial conditions that Tobias had mentioned at the beginning, there is always the risk that this could trigger an adverse feedback loop between the sovereign and banking sectors and through various channels. I think the question talks about some of these channels and what they are, and this, again, looks at situations where the higher sovereign borrowing rates could have an adverse impact on bank conditions, impacting the balance sheets. Tighter borrowing constraints would also have an impact in terms of government’s ability to support the stressed banking sector. These are the kind of issues, amplification channels, which are actually quite extensively covered in Chapter 2 of the GFSR.

Then the question really looks at what sort of policies, sort of recommendations that could be made. These are, again, outlined in the report. They involve looking more closely at some of the risks that the sovereign-bank nexus provides, being very vigilant to these risks. At the same time, we also recommend that banks should be having stress tests being conducted and against these amplification channels that I have outlined. And on a more sort of medium‑term basis, there should be more efforts being placed in terms of addressing some of the issues which are associated with building a more deeper and diversified investor base. So, these are some of the recommendations that we put forward in the chapter.

Ms. Elnagar: Thank you, Ranjit. We know now that WebEx is functioning well, so we go back to our WebEx questions.

Question: Thanks for doing this. Tobias, could you talk about, there is a lot of people when you talk to them that the Fed has lost credibility in the markets. I think that either people think inflation is going to go too high, and the Fed will not get it under control, or the Fed will not be able to achieve what it wants, like a soft landing, and there will be a recession. Has that shown up in financial markets, and if not, what should we be looking for to see if it does? Thanks.

Mr. Adrian: Thank you. That is an excellent question. The Federal Reserve in the United States is facing a tremendous policy challenge. Last year coming out of the COVID pandemic, inflation was already elevated due to supply chain disruptions. Then this year, the war in Ukraine hit, and inflationary pressures were increasing even more. There are more supply chain disruptions. There are higher commodity prices and higher food prices, so there are more inflationary pressures than what was previously expected. So, when we look at the monetary policy in the US, we can see that policymakers have really tightened the forward guidance about the path of interest rates going forward. So, the path that is priced into markets is much steeper and a much earlier tightening than what was priced in just a couple of months ago.

We view the stance of monetary policy by the Federal Reserve as appropriate, and in our baseline forecast, we do have a softening of economic activity, which is the intended outcome of tighter monetary policy, but at the moment we do not forecast a recession. Having said that, there are risks around that baseline, and if further adverse shocks are hitting, further supply shocks or further adverse shocks to real activity, certainly we could see worse outcomes than what is forecasted in the baseline. We are in an environment of high risk, and it is very important for the Federal Reserve to be data‑dependent and to be very clear in the communication about monetary policy going forward. Let me turn to Fabio to complement me.

Mr. Natalucci: Thank you for the question. I think I would add a couple of things. As Tobias mentioned, the risks to the inflation outlook are on the upside, not just in the US but in a number of countries. We monitor closely risks related to the inflationary pressure becoming entrenched, inflation dynamics, as well as the possible deanchoring of inflation expectation; so we look at things like the TIPS market, so like inflation‑protected securities. There you would see the long‑term inflation expectation, or proxy for long‑term inflation expectation, have remained largely anchored at this point.

We also look at other markets’ measure, for example, options. There I think you get a little bit more worrisome message. So, right now the probability of inflation above 3 percent any year between now and the next 5 years is about 65 percent in the US, about 60 in Europe, and even higher in the UK, for example.

We try to take a broad view on inflation measures, inflation expectation measures. That is why it is important that the central banks act decisively to bring inflation back to target in a credible way while at the same time avoiding disorderly occurring financial conditions that may put the recovery at risk.

Ms. Elnagar: Thank you very much. We go to WebEx.

Question: Thank you, Randa, for taking the question. I have two questions. First to follow up on the Fed question. The report said central banks should avoid a disorderly tightening of financial conditions, so as the Fed signaled that it will act more aggressively at its upcoming meetings, how likely is there a risk of disordered tightening, and what could be the implications for emerging markets?

The second question is about China. The report talks about highlighted financial stability risks in China and saying that extraordinary financial support measures may be necessary to ease the balance due to pressure, but it would add to medium‑term data vulnerabilities. How does the IMF suggest that China can make efforts to strike a balance? Thank you.

Mr. Adrian: Thank you for both of these insightful questions. Let me start with a question about the Federal Reserve. The intended consequence of monetary tightening is to get to a tightening of financial conditions that then slows down aggregate demand, slows down economic activity, which in turn brings down inflation. So, some tightening of financial conditions is intended, but, of course, you do not want a disorderly tightening of financial conditions. So, “disorderly” is the kind of selloff and dash for cash that we saw in March 2020 at the onset of the COVID pandemic. Yes, we want a tightening. We want tightening not just of monetary policy, so not just of interest rates, but also of broader financial conditions; but we will watch very closely to what extent that is an orderly tightening; and an orderly tightening, of course, would feed into an orderly slowdown of economic activity, which is what we are forecasting in the baseline, which would then bring down inflation back to target.

It is extremely important to tighten monetary policy at this point in order to prevent an unmooring of inflation expectations. As Fabio has explained, at the moment, medium‑term inflation expectations are well anchored, but, of course, there is a risk of de-anchoring, so there is a risk that expectations would move beyond the target level in a markable manner. That has not occurred, but it is a risk that needs to be addressed via a tightening of monetary policy.

Let me go to the second question on China, and then also ask Fabio to complement me. In China, we have two adverse shocks. One is the COVID situation, which requires lockdowns in many cities in China, and that is fueling further supply disruptions and potentially has an impact on aggregate demand and sentiment.

The second shock, and one that had occurred already earlier, is the slowdown in the property sector. The property sector is a very important segment for both investment and consumption in China, and some of the biggest property developing companies in the world are in China, and many of them are in distress at the moment because of this slowdown of the property market. That, in turn, can have macro consequences.

Mr. Natalucci: Just to follow up on Tobias, so clearly we have seen compared to the Global Financial Stability Report in October, intensification of the pressure of tightening of conditions in the property development market and the risk that liquidity risk, in fact, may turn into credit risk. Some measures have been taken, for example, channeling funding to the healthier segment of the property developers; a reduction in mortgage rates; access to availability of mortgages.

Now, in addition to local measures, obviously, I think central government measures would actually be helpful. I think the intent here is to avoid that the contagion goes beyond the real estate sector to the broader economy. The report identifies a number of channels, so liquidity risk in the property development sector may actually have implications for the broader real estate through decline in house prices, decline in sales, declines in land sales. That could also have implication for local government, for example, whose revenues rely heavily on land sales. Local governments also have connections with corporates, local corporates, as well as with the banks. You can see easily how some of these macrofinancial feedback-loop effects actually go from one sector to the broader economy, including the financial sector.

Now, the PBOC has taken some measures. Those are helpful measures. I think they should consider broadening or stepping up use of fiscal policies, particularly measures that lessen the impact on household balance sheets, as well as smaller firms, for example. Then ultimately structural measures are also important, both in the real estate sector and the property developer sector, addressing some of the vulnerabilities there, as well as other structural measures in terms of deleveraging the financial system. Chinese authorities have taken a number of steps over the years to address these vulnerabilities.

Then one last example, also investing in climate finance, so investment in greens so that to help the decarbonization of the economy.

Ms. Elnagar: Thank you, Fabio. Eric Martin from Bloomberg.

Question: I wanted to ask about one of the risks highlighted in the report about the use of cryptocurrencies to evade sanctions on countries, including Russia and Iran, and how much of a concern this is in terms of the financial stability risks that are out there. Thank you.

Mr. Adrian: Thanks for that question. That is a very important topic, and it is a segment of financial markets that we are watching very closely. So, the main challenge, of course, with using crypto assets to circumvent sanctions is that if you move money into crypto, at some point you have to get it out; and for that you need a traditional financial institution eventually. So, you need to get back into the banking system, and, of course, the banks are subject to the sanctions, so putting money into crypto is one thing, but then getting it out is challenging. So as a result, what we are seeing is indicative—there is no comprehensive data on crypto assets, but we do have a lot of evidence that is suggesting—that there is relatively little activity at this point in terms of undermining sanctions via crypto assets. There are, in particular, two main sources of evidence. One is price based, so when you look at the kind of scarcity premium within Russia, there is not much of a premium there in order to go into bitcoin or other crypto assets. So, it is a very slight premium, but it is not very elevated in comparison to other countries. It does not look like from a price‑based approach there is a scarcity of crypto assets in Russia.

Secondly, when we look at activity in Tether, which is one of the stablecoins, there was a slight spike after the invasion of Ukraine, but the magnitude of the spike was not very large relative to the total economy; and since the early days, the spike has come down, and so stablecoin activity from what we can see out of rubles into other currencies is very limited. Our punch line is that the evidence to date suggests that there is not much going on in terms of undermining sanctions via crypto assets. Of course, it is something that we are watching very, very closely, and we will keep a watchful eye on it.

Ms. Elnagar: We will go to the online questions now. It is a focus a bit on emerging economies. There is a question: What are the expected effects of the increase in global interest rates on developing economies, specifically on Egypt, considering that Egypt already increased interest rates by 1 percent.

Mr. Adrian: That is an excellent question. Let me start with the big picture first and then perhaps turn to Ranjit to give a little more detail on Egypt in particular.

The big picture is that we are seeing a lot of differentiation across countries in terms of capital flows. Emerging markets are all subject to those pressures of tightening monetary policy globally, so interest rates are rising, financial conditions are tightening; but in terms of capital flows we have not seen a major risk‑off event at this point. Rather what we are seeing is that some emerging markets see outflows. China is one country where there are quite a bit of outflows of capital but also emerging markets that are importers of commodities and food in particular, and this is, of course, the case for Egypt.

Egypt is importing food, in particular wheat, specifically from Ukraine and Russia. So that is an adverse development for Egypt, which is putting inflationary pressures in the country and is putting pressures on capital flows. We have seen other countries where capital has flown in. For example, Brazil has seen capital inflows recently, and Thailand has seen capital inflows recently. So, it is quite a bit of differentiation across countries. Commodity exporters have also seen capital inflows to a large extent. Egypt, unfortunately, is hit by these higher commodity and higher food prices. Ranjit?

Mr. Singh: I think, Tobias, you have covered a lot of the key ground in respect of the differentiation that we are seeing within emerging markets. I think quite clearly in the case of the question really sort of alludes to the impact that the increase in global rates are going to have on developing economies. Clearly there is going to be an effect on exchange rates, capital flows. Tobias has mentioned the capital flow effect that is happening already. And on top of that you are also seeing—and that sort of pressure is essentially going to create more stress in terms of domestic yield curves and cost of funding domestically as well.

I think compounding the challenges, of course, are these inflationary pressures that Tobias has alluded to having an impact on emerging markets. So the central banks in emerging markets are also facing the challenge of trying to contain the inflationary pressures while at the same time ensuring that they continue to be able to manage the cross‑border spillover effects that may adversely impact in terms of growth.

Now coming to Egypt, of course, Egypt’s economy is particularly exposed to these sort of pressures, and, again, as Tobias pointed out, it has a very large exposure in terms of its wheat imports. It is one of the world’s largest wheat importers with 50 to 60 percent of its wheat coming from Russia and Ukraine. And clearly that is having an impact in terms of inflationary pressures in Egypt, and Egyptian spreads had already begun widening prior to the invasion, in fact, with high external financing needs, rising inflation, and limited fiscal space. So these are certainly factors which are having a bearing on Egypt.

Although Egypt has taken measures to stabilize its external accounts in recent weeks, including the devaluation of the Egyptian pound and the 100 basis points hike that the question alludes to, there are still significant concerns that certainly need to be managed.

Ms. Elnagar: Thank you very much, Ranjit. We will stay on emerging economies and take one more question online:

Mexico completed two sequential years with capital outflows, and since the beginning of the war, the investors sold more Mexican debt bonds. Can you please make some recommendations to the Mexican authorities to face this situation.

Mr. Adrian: Thanks so much. Of course, Mexico is an exporter of both oil and other commodities, as well as of food, and the impact of the War in Ukraine is relatively less pronounced on Mexico at the moment. Furthermore, Mexico was very early in terms of raising interest rates in the face of inflation, and it has done well in that respect as well. So, I would characterize the situation as a fairly robust one. I do want to flag that there will be a regional press briefing as well on the Western Hemisphere and specific questions on Mexico, and other economies of the region can be answered in that context.

Ms. Elnagar: Thank you very much. We go back to WebEx.

Question: Thank you so much. I was just curious if you could outline in any detail any of the potential fallout with the commodity market dislocation that we saw recently, if there was any kind of concern of private trading houses nursing losses that could potentially dent liquidity and any other potential ramification from that market event.

Mr. Adrian: Let me give you the big picture and then pass to Fabio who has looked into these questions in great detail. I think the big picture is that conditions in commodity markets tightened tremendously as volatility shot up, prices of commodities shot up, and margins. So, when you have leveraged positions in those markets, you have to put up margins, and those margins increased tremendously as volatility increased.

There has been some distress, in particular the very well‑publicized event at the London Metals Exchange where the nickel went to extremely high levels, and some participants were distressed. But more broadly, markets have generally functioned well. Now having said that, it is a market that is very concentrated, and there are certainly regulatory and policy issues that will need to be addressed going forward.

Mr. Natalucci: Thank you for the question. I think the report focuses primarily on two channels. One is the financing of commodity shipments, and the other one is the commodities derivative market. In the first case, we have seen it rising in shipping costs and increasing financing needs of some of the trading energy companies. They need to finance their shipments. That is one channel of stress and where the disruption in commodity markets has impact on the financial system.

The second channel is through derivatives market. We have some of the producers usually they try to hedge their position, and broker‑dealer and dealer banks are at the center of the financial system. They are intermediaries there. And then you have a number of other participants. We focus primarily in the report on the dealer banks’ role. They play a significant role. Again, they provide financing. They play an intermediation role in the derivatives markets. They also provide leverage to some of these players.

Another channel is through this, you mentioned the energy trading companies. So, it is the concentration angle, if you want. So, there is concentration both on the dealer bank side, so there has been a decreasing number of banks at play active globally in these markets, as well as the commodities trading terms. There are a small number of those. They are relatively large. They are global. They are largely unregulated, and they are often private. There is not much information to actually look into the exposure of the dealer banks to these players. Those are primarily the channels we are focused on.

I think in terms of policy recommendations we have a few [codes] there. One of them being to make sure that from the dealer bank side there is adequate disclosure, as well as visibility in some of these positions, so in terms of capital position as well as like margins availability, when there are margin calls, and then also visibility in terms of the global picture I think in terms of these markets. Again, those are global banks. Those are global energy trading firms. They are often unregulated. They are often private, and we have seen some pressure actually in the bond price of these firms; so reportedly reflecting concern about liquidity, as well as credit at some of these energy firms.

Mr. Singh: I think just to add on to Fabio’s very comprehensive view in terms where the issues are, I think at a broader level, just to follow on to a point that you made, Tobias, in the beginning, in terms of NBFI regulation, I think there has been a lot of attention focused post‑GFC on the financial derivative side of things; and I think there is probably an option time now for a more closer look at the broader regulatory implications on the commodity space by market by regulators, et cetera. This is important. So aside from a few key jurisdictions where there has been this focus, I think there certainly is a lacuna which would benefit from a closer look in terms of both the depth of regulation, the points that Fabio was making, in terms of gaps there, the perimeter, and where there are the pockets of opacity which need to be addressed. Those I think are very important as well.

Ms. Elnagar: Thank you very much. We stay on WebEx. Please go ahead.

Question: Thank you for doing this, and thank you for taking my questions. I am wondering if you can talk a little bit more about the Sub‑Saharan African region in terms of financial stability risks. What are the main threats now, right now? Are they the rising debt due to COVID‑19 and all the loans that the IMF gave African nations in 2020 and 2021? Is it the rising inflation due to food prices as a result of the War in Ukraine? And if you can also talk about more about how all these will affect oil‑producing countries like Nigeria, Angola, and even unstable countries like Ethiopia.

Mr. Adrian: Thanks for the question about Sub‑Saharan Africa. In the COVID pandemic, Sub‑Saharan Africa was hit hard in terms of the level of output. The impact of the pandemic itself was perhaps less pronounced than in other parts of the world, but the economic impact was pronounced. As the war in Ukraine hit, Sub‑Saharan Africa was still in the recovery phase, so it had not made up all the losses that occurred during the COVID pandemic.

As you allude to, an important policy lever for countries during the pandemic was to use fiscal spending, and so in many countries we have seen an increase in sovereign debt. So looking across countries, one very important distinguishing feature is whether countries are commodity importers or commodity exporters; and there is certainly differentiation in the marketplace across those countries in terms of pricing in sovereign debt, so the spreads are very different for commodity importers and commodity exporters. That I think is one important differentiation.

The second important differentiation is the level of public debt. A number of countries are in debt distress. They are working on restructuring their sovereign debt, and that, of course, is impacting their funding costs. But other countries are able to issue, so even relatively riskier issuers have come to the market in recent months and have issued in the frontier space.

Finally, let me point out that a number of countries, about 20 percent of emerging markets and frontier economies in the world, are currently trading at basis points above 1,000, and so that is indicative of the stress among this group of countries. The amplifying factor here, of course, are food imports. The fact that food is imported in the vast majority of Sub‑Saharan countries puts a stress on public finances, and that is certainly a challenge going forward. Let me stop here.

Ms. Elnagar: Thank you. We still stay on WebEx, and we have MENA News Agency with a focus again on North Africa in this case, and he wants to ask about inflation.

Question: I want to ask about inflation. The crisis of inflation is not any more related to a specific country, so all countries should deal with inflation, debt and the [inaudible] targets. How would the IMF deal with more than 100 countries, the most vulnerable countries, in dealing with the crisis if the [prices] still continues to rise?

Mr. Adrian: That is an excellent question, and as you are pointing out, there is a scarcity of food in a number of countries. The extremely elevated food prices at the moment are putting a lot of stress on countries. The IMF is doing everything it can to help its membership, and we have the ability to provide rapid financing, so, for example, Egypt has obtained rapid financing; and there is also the ability to have more traditional IMF programs in order to help countries. We are there to help the membership, and again in the regional press briefings there is a lot more depth on specific regions such as North Africa and what kind of programs are in progress.

Ms. Elnagar: Thank you, Tobias. I have received another question actually online. It was submitted about the ECB, and do you think it is time for the ECB to raise rates, and how early can they do that?

Mr. Adrian: Well, in the Euro Area, inflation is also very elevated and notably above target at this point. This is particularly so because Europe is importing gas and oil from outside of Europe, in particular from Russia. So,energy prices have come up tremendously, as well as food prices, and that is impacting core inflation as well. So, core inflation, the items in the consumption basket that are other than energy and food, and so these inflationary pressures are making a tighter stance of monetary policy necessary in Europe.

The European Central Bank is on the path to tighten, and that is via a normalization of balance sheet policies. This is already in progress, and there could eventually be increases in interest rates as well, though it is too early to say at what point that would be appropriate. The monetary policy continues to need to be very data‑dependent. We are in an environment with a lot of uncertainty, and there is the negative supply shock through commodity and food prices, but there is also a slowdown of real activity due to the war in Ukraine. So monetary policy needs to communicate well to markets about its intention going forward and has to be very much data‑dependent. Fabio, do you want to—

Mr. Natalucci: The ECB, like the Fed, has initiated a process of normalization of policy, so they are slowing down asset purchases. They have indicated that they will, some time after the end of that, start thinking about raising the policy rate. They have communicated that they intend to do this in sequences, so they are communicating the sequence of this, and they also intend to be flexible. So they are going to be data‑dependent based on how the economy is going to progress and how inflationary pressure will progress.

One risk that they will be playing close attention is the risk of fragmentation in some sense in the transmission of monetary policy. We have seen some spread widening in southern European countries once the ECB have initiated the normalization process. So at this point it is important to be data‑dependent, act decisively, and avoid fragmentation within the eurozone.

Ms. Elnagar: We have one last question before we wrap from Nigeria.

Question: My question is concerning Nigeria. Our inflation rate in the country has been trending upwards in recent times, and the central bank is seemingly adamant on raising interest rates, benchmark rates. What policies are you looking at? Do you think on prioritizing controlling inflation in the country, and also is the IMF concerned about the rising debt in the country? Thank you.

Mr. Adrian: Thanks so much for this question. Nigeria is, of course, both an oil exporter but also an importer of refined oil. So on that, it does not benefit as much from the rise in commodity prices and oil prices in particular because of this dual nature of being both an exporter of raw oil but an importer of refined oil. So the net impact is one of inflationary pressures; and as you point out, the central bank has moved towards tightening monetary policy, and there are other challenges, of course, in Nigeria which need to be addressed as well.

Ms. Elnagar: Thank you very much. We are going to be wrapping up now, so let me thank our speakers, Tobias, Fabio, and Ranjit. Also thanks to our viewers who joined us today. We would like to remind you of the release of the Fiscal Monitor tomorrow 7:00 a.m. morning, D.C. time. Thank you.