Transcript

Transcript of IMF Press Briefing

July 13, 2023

MS. KOZACK: Good morning and welcome to this press briefing, both to those of you in person and those who are joining us online. I am Julie Kozack, Director of the IMF Communication Department. This briefing is embargoed until 11am eastern time. I will start as usual with some announcements and then we will of course go to your questions in person, on Webex, and on the Press Center.

I am going to start with travel. On July 17 ^th and 18^th, the Managing Director and the first Managing Director will travel to India to attend the G20 Finance Ministers and Central Bank Governors meeting in India. In advance of the G20 meetings, earlier this morning we released the Managing Director’s blog on the G20, as well as the G20 surveillance note, that give you an update on the global economy. And you can find these documents on our website at IMF.org.

I would also like to bring to your attention that the IMF will be unveiling a few key documents in the coming weeks. First is our external sector report, ESR as we call it. This will be released on Wednesday, July 19^th. As you might recall this report provides an analysis of global external development and an assessment of the external position of the world’s largest economies. Representing over 90 percent of global GDP. A week after that, on Tuesday, July 25th, we will be publishing our World Economic Outlook Update at 9AM local time, eastern time. The IMF Chief Economist and Economic Counsellor, Pierre Olivier Goren Shaw, will also hold a hybrid press briefing that will be streamed on our social media. As a reminder to all of you, the 2023 Annual Meetings will be held from October 9-15 in Marrakesh Morocco. Journalist registration to attend the 2023 Annual Meetings is now open, you can visit IMFconnect.org to register. And we are advising you to please register before September 28th.

And last but not least, and for planning purposes, please note that the board, the MF executive of board will be in recess from July 31 ^st until August 11^th. And we shall notify you of the date of the next briefing in the coming weeks. So, with that, I will now turn to your questions. Please remember to by yourselves in the media outlet that you represent. Okay. Let us start here in the back.

QUESTIONER: Thank you for taking my question. So, Secretary [of the] Treasury, Yellen, visited China and held bilateral talks with the Chinese officials informing them that the U.S. will use tools against China to protect its national security, such as semiconductor restriction. China has responded by imposing export control on critical minerals using the insulin conductors. My question is what implications you see in terms of global economic growth and trade from a situation where the world's two largest economies imposing strict export controls on each other. Thank you.

MS. KOZACK: Thank you very much. So first, I think it is important to note that we welcome the recent meetings between Secretary Yellen and top Chinese officials in Beijing. As we have said before, China, the United States, and other major trading partners should continue to work together to address core issues that risk fragmenting the global trade and investment system. The recent economic talks between the U.S. and China will help forge ties, build common ground, and foster cooperation, in areas that are vital to global investment and growth. We have also warned on multiple occasions about the costs of fragmentation in line with some of what you were referring to. Our analysis suggests that full or runaway trade fragmentation could cost the global economy, seven percent of GDP. That would be very harmful for the global economy, especially at a time when we see weak global growth.

QUESTIONER: Question on Argentina. I am sure you can give us an update on the negotiations. But I was hoping you could confirm or deny that director, Zhang, from China, sent a letter to the board, and to Ms. Georgieva, stating that Argentina could use or keep using, swap with the Chinese Central Bank to pay off the IMF in the coming months.

MS. KOZACK: I am sure we have other questions on Argentina. Let me know if anybody have other questions on Argentina. Maybe online? Okay. It is very hard for me to see the Webex. So, I think if there is a question on Argentina and you are on Webex, just jump in.

QUESTIONER: Following the question of Rafael, I would like to know if an agreement is not reached until the end of July. Is this possible that the negotiation will follow-up follow in September? Thank you.

QUESTIONER: I wanted to add if the main discrepancy currently in the negotiations is the primary deficit number.

QUESTIONER: I also want to ask in Argentina. Well, yes, first to confirm that part of the payment was made in in Yuan. And how did that work? The technical part of it, did they did they pay directly in Yuan, or did they buy SDRs to pay funding in or how did it work specifically. And is this payment method available to all members and will it continue to be in the future?

QUESTIONER: I would like to ask if you can talk about the logistics of negotiations following on Rafael's question. About, you know, there have been rumors in Argentina for many weeks now about an Argentine technical team coming to Washington. If you can give us any expectation regarding timing or talks or meetings that are actually scheduled between IMF staff and Argentine authorities.

MS. KOZACK: Thank you so much for all of your questions. In terms of the update, where are we in Argentina? The teams have been working intensively. Our team has been working intensively with the Argentine authorities to make progress toward the completion of the fifth review. And to help the authorities address a very complex and challenging situation. As I have noted before, the focus of these discussions has been on alternatives to strengthen the authorities' program, while recognizing the act of the drought on the economy. And this includes discussions on policies to safeguard stability, by enhancing reserve accumulation and improving fiscal sustainability, while of course protecting the most vulnerable parts of the population. In terms of the details of those of the discussions, because the teams are still in discussion, I will not pre-empt those discussions and I will not get into the details other than to say that the discussions are frequent, and they are aimed at advancing the program. And we will communicate more on the details of the program when we have them. With respect to a couple of the other questions on the letter, us under understanding is that there is no such letter. With respect to the payments in RMB, our general practice is not to comment on the specific transactions of a member country. As we have stated in the past, the Argentine authorities continue to remain current on their financial obligations to the IMF. The RMB is one of the five freely usable currencies that members can and have used to settle their obligations with the IMF.

QUESTIONER: Is there an actual material time to reach a deal before the board goes into recess? By the end of July, there is only, like, two weeks left. And I know that there is a lot of steps that even a staff level agreement needs to go through before it reaches the board. So, after three months of negotiation, is there time? Is it feasible to expect a deal at this point?

MS. KOZACK: I will just repeat that the teams are working intensively with a view to making progress and completing the fifth review. Okay. David.

QUESTIONER: I had a question regarding the inflation outlook. Yesterday, there was some fairly benign data coming out of the United States showing that inflation is starting to subside a bit. I am wondering if the IMF is viewing inflation as a period that we've kind of gun a period of disinflation, whether that process has started. It has been something that's been long awaited to sort of turn that corner Have we done so yet and how far might this spread to other countries.

MS. KOZACK: What we are seeing in the U.S. is a decline in headline inflation. But at the same time, headline inflation does remain above target. And in particular, core inflation has remained sticky and above target. And this is a pattern that we see not only in the U.S. but globally, where the reduction particularly in energy prices is helping to reduce headline inflation, core inflation remains sticky. For, and of course, this reduction in inflation momentum is, of course, very welcome. But inflation does still remain a concern. More specifically in the U.S. what we are seeing is that goods price inflation is moderating, has moderated. Shelter price inflation is expected to decline in the coming months. But non shelter services inflation is not yet on a clear downward trajectory. And for this reason, our policy advice in the U.S. and elsewhere is for central banks to stay the course on monetary policy until a durable reduction in inflation is achieved.

QUESTIONER: Is the services price inflation is that sort of being driven by the demand for travel, for tourism, those types of situations? Or is there something else at play there?

MS. KOZACK: I do not have the details for you. The breakdown of services price inflation, but I do not have them here now, but we can come back to you, bilaterally, with some more details on services price inflation.

QUESITONER: So, my question is about Ukraine. Under the current memorandum, Ukraine has a benchmark to enact and restore the declarations of public officials at the end of this month. Now Ukrainian parliament members are working to change the condition of the declaration process. So, the question is, are such kind of changes consistent with the IMF's expectations and the requirements of the memorandum and how important is it for Ukraine to reach this benchmark on time?

MS. KOZAK: So, I will give you an update on where we stand on this Well, let me give you an overall update on where we stand with Ukraine and then I will address this specific issue. So, on June 29 ^th of this year just a few weeks ago, the IMF Executive Board completed the first review of the EFF for Ukraine, allowing the authorities to draw the equivalent of 890 million U.S. dollars, which will be used for budget support. As background, the EFF was approved in March 2023 and forms part of a total package of support for Ukraine of 115 billion U.S dollars. All quantitative form as criteria under the program for end April and structural benchmarks through and June were met. And that paved the way for the Executive Board's consideration of the first review. The Ukrainian economy is showing remarkable resilience and recent economic developments point to a gradual economic recovery in 2023. Although the outlook obviously remains highly uncertain as exceptionally high war related uncertainty persists.

Now, with respect to your specific question on the law. Our team has been in close con consultation with the Ministry of Justice and other key stakeholders in Ukraine. In developing the asset declaration draft law, consistent with government's commitment in the memorandum for the recently concluded review. In particular, any enhancements to the asset declaration system during the martial law period will not reduce the overall effectiveness of the system nor deviate from public officials' obligations to submit truthful, complete, and accurate asset declarations. Timely enactment of the asset declaration draft law will help mitigate risks during martial law and therefore promote public trust as well as donor confidence.

QUESTIONER: Just to follow-up on Ukraine and a couple of questions about it. So, when the next review under the extended fund for facility Ukraine is scheduled that will allow to draw another transfer that will be the amount of, what amount transfer will Ukraine expect next time. And another question is about the Russian economy. How could the Russian currency turbulence impact on the Russian economy in terms of real GDP growth, households, net income, business conditions and the inflation rate from the IMF perspective. And the very first question I would like to ask you, but anyway, IMF Director for Russia, Alexei Mozhin, in his recent interview for Ryanovisti [said] that many countries around the world, including European states, are in critical condition in terms of public debt. Does the IMF see any meaningful risks or major debt distress, debt crisis in Europe, in the United States, in the short-term perspective Thank you so much. And sorry for long list of questions from my side.

MS. KOZACK: On Ukraine, we expect the next review later this year. On your question on Russia, we will have an update of our Russian growth forecast in the context of the WEO update, which will be published in later this month. In general, the impact of the war on the Russian economy has been substantial, but also milder than previously expected. In 2023, we expect our last forecast had growth in the positive range of 0.7 percent. However, in the medium term, the Russian economy will be hampered by the departure of multinationals, the loss of human capital, its disconnection from global financial markets, a reduction in its policy buffers. And therefore, we do expect over the medium term that output in Russia will be 7 percent lower than the pre-war forecast. And on your last question on debt, in general, what we have seen globally especially since the pandemic is of course an increase in in debt levels globally. And this is part of why our policy advice to countries now is that fiscal policy can be undertaken very prudently, including to support the fight against inflation so that fiscal and monetary policy are at together to reduce inflation. But also, to ensure that fiscal policy is put on a path that is sustainable and ensures that buffers are rebuilt. Okay. Let us Yes, right here.

QUESTIONER: I will try to be brief, but it is related to Pakistan of course, and that whole region, we have seen a lot many things. So, Pakistan has been into IMF programs 23 times and what key reasons you see the country could not make it through till today. And wouldn't the IMF's credibility be at stake for that very country when the country has been into these many IMF programs. And always, the burden has been passed on to the working class and the middle class and the lower class. Elite has never been of impacted with that. And second would be if IMF and Pakistan are actually planning any long-term commitment, long term program because apparently this 9 months SBA won't be enough to get Pakistan out of that current economic turmoil. Considering their restructuring of bilateral or multilateral loans. So, and the third one excuse me, for but Pakistani officials did say on record as well that there was geopolitics involved in delaying whole deal and all that for the last 9th review when we are talking about 23rd program. So, and they actually, as well said, IMF has changed the goalpost multiple times. Do you have anything to say on that?

MS. KOZACK: So, let me step back and give you the overview of where we stand with Pakistan. So just on July 12th, our Executive Board approved a 9-month standby arrangement for Pakistan in the amount of 3 billion .US. dollars. And this program is aimed at supporting the authority's economic stabilization plan and economic stabilization program. The immediate disbursement reached about 1.2 billion U.S. dollars. The new program will anchor the authorities’ immediate efforts to stabilize the economy. With due protection for the most vulnerable and provide a framework for financing from multilateral and bilateral partners to support Pakistan's the Pakistan government's policies. Steadfast policy implementation is critical in the period ahead. This will be critical for success of the program and, of course, ultimately, for to aid and support the people of Pakistan.

Now, with respect to the question about the standby. Right? Why do we have a relatively short program? The standby [arrangement] is aimed at supporting the authority's immediate effort to stabilize the economy and to ensure that the current balance of payments need is filled. While it is relatively a relatively short program, it provides time for Pakistan to implement policies critical to strengthening it is domestic external economic situation, thereby supporting sustainability. Of course, resolving Pakistan's structural challenges will likely require continued reforms over the medium term to underpin the needed economic transformations, to strengthen inclusive growth prospects, and to create an environment conducive to renewed private capital inflows. And of course, we at the IMF, we always stand ready to work with Pakistan and the Pakistani government on these efforts to restore sustainability and an economic stability.

QUESTIONER: I have two questions one is also on inflation, but on China. According to according to Chinese last GPA data, China seems to be facing a deflationary risk. And in your last WEO report, about the world economy, should it be driven by Chinese reopening. Could the story or narrative be changed or fine-tuned? What is your view on the point? And the second question is on Zambia. Zambia finally reached the agreement over creditors, countries. And what is your view on the investor sentiment improvement? With the agreement. And what is your view on the point? Thank you.

MS. KOZACK: So, starting with China. So, when we look back to the April WEO, we were projecting growth in China of 5.2 percent. And that growth reflected a relatively strong first quarter after the reopening, but it also envisaged growth slowing over the course of the year. And indeed, that is what we have been seeing. Growth momentum has been slowing recently in China, largely due to weaker than expected private investment. Exports have also slowed recently after strong performance in the first quarter, owing to supply change normalization after reopening. So, the overall picture for growth in China is one of a slowing economy, and that is consistent with the forecast that we that we had in in April. And of course, we will update that forecast in the upcoming WEO.

With respect to inflation, we do observe in subdued inflation in China, and this largely reflects the weak demand and the slack in the economy, amid an incomplete recovery. And it also reflects as elsewhere in the world, declining energy prices. So, in line with global commodity price movements. With respect to Zambia, we are very pleased to have that Zambia has reached agreement with its creditors on a debt restructuring. This is critical for us to be moving ahead with completion of the first review of Zambia's program. As background, you may recall that in August of 2022, the IMF board approved for Zambia a 1.3-billion-dollar arrangement. ECF arrangement for Zambia. On April 6^th, 2023, staff level agreement for completing the first review was announced. On June 22^nd, the agreement with the official creditor committees between Zambia and the official creditor committee on a debt treatment was reached. And that agreement provides sufficient financing assurances and has cleared the final hurdle for us to move ahead to the board. As you may know that board meeting is happening today, and we will communicate the further details of the of that meeting after the meeting has ended. Let us go Eric and then Kimmy.

QUESTIONER:Thank you. I would like to ask a follow-up question to the question that you just took on Pakistan. Which is, did the IMF ask Pakistan for any new financing commitments? I know that this has been a sticking point in the last program, but we did not see a mention of a request for a new financing commitment in the statement on the new program that was approved just yesterday. And then on Mozambique, the IMF board recently completed the second review of Mozambique's extended credit facility There were some waivers and modifications of conditionalities to complete the review and make the disbursement. How concerned is the fund about growing risks for Mozambique and does the country potentially face further difficulties in debt servicing with the continued delays to its natural gas projects?

MS. KOZACK: On Pakistan, I will come back to you on that question, Eric, because I am not sure exactly what it is referring to. So, we will follow up bilaterally on the question.

And then on Mozambique, I can update you on where we stand. So, as you note, Mozambique is receiving Fund support through an ECF arrangement for about $456 million. That arrangement was approved in May of 2022. The second review of the program was completed very recently, July 6th. And our Executive Board noted that program performance was broadly favorable and that the authorities have taken substantive actions to resolutely address macroeconomic challenges to keep the program on track.

In the fiscal area, the authorities quickly adopted measures to reduce the wage bill and keep the fiscal outlook aligned with program targets. In the monetary area, the Central Bank has taken appropriate action to contain inflationary pressures and reduce drains on FX reserves.

So, that is basically where we stand with Mozambique. The review has been completed. The authorities have taken appropriate actions, and the team is engaging and working closely with the authorities on their economic plan.

QUESTIONER: So, I was wondering if you could talk about the Fund’s activity in Senegal and Nigeria, and regarding the G20 on debt distress, and if you can talk about the Managing Director’s activities regarding Chad, Ghana, and other country in developing world.

MS. KOZACK: So, let me start with Nigeria. I can give you an update on where we stand. So, in Nigeria, the most recent Article IV consultation was concluded on February 6, 2023. IMF staff has been engaging closely with the transition team, elaborating on the IMF’s policy recommendations, and providing policy advice if requested. The IMF welcomes the recent removal of fuel subsidies and the unification of the exchange rate regime.

Increasing well-targeted social spending will be critical to mitigate the impact of the removal of fuel subsidies on the most vulnerable. And strengthening revenue mobilization through tax administration reforms is also essential to create fiscal space, reduce vulnerabilities, and put public debt on a sound footing.

As to inflation, we do expect inflation to increase in the coming months. And as a result -- or because of that, fiscal and monetary policy tightening, including reducing Central Bank financing of government fiscal deficits are needed to prevent a further escalation of inflation. So, that's on Nigeria.

With respect to Senegal, I can also give you a similar update. On June 26th, 2023 -- so just recently -- the Executive Board approved an ECF -- extended credit facility -- and an EFF in the amount of $1.5 billion US. This blend program is aimed at helping Senegal's protracted balance of payments challenges, as well as addressing macroeconomic imbalances.

As to the policy priorities under the EFF/ECF program, they include reducing debt vulnerabilities by embarking on a fiscal consolidation path, strengthening public sector governance and AML/CFT, fostering a more inclusive and private-sector-led growth.

And I should just emphasize here that with respect to fiscal consolidation, there is two points that we would emphasize. One is the importance of revenue mobilization as part of the fiscal consolidation effort, and the importance of phasing out energy subsidies while protecting the most vulnerable.

In addition to the ECF/EFF blend, our Executive Board also approved a $324-million resilience and sustainability facility, which will support Senegal's climate change mitigation objectives, accelerate its policies to adapt to climate change, and help integrate climate change considerations into the budget process. That is the update on those two countries.

And then on debt -- stepping back on the issue of debt, we do know, of course -- and we have talked, I think, many times in this room about the challenges of debt globally. We have many, particularly of our low-income and vulnerable countries, at or near debt distress. And for many of these countries, they require a debt restructuring or debt treatment. The G20’s common framework has been delivering on debt restructuring cases, such as the ones that you have mentioned, Chad, Ghana, and Zambia. And also, debt restructuring has been proceeding in countries outside of the common framework, such as Sri Lanka. And creditor coordination is progressing.

Of course, we recognize that the debt restructuring process needs to accelerate, it needs to be predictable, it needs to be timely, and it needs to provide breathing space to debtor countries through debt suspension during negotiations. To help accelerate the debt restructuring process, the IMF, along with the World Bank and India as G20 Chair, have initiated the Global Sovereign Debt Roundtable. We had a first meeting in February that brought together, for the first time, traditional Paris Club creditors, non-Paris Club official creditors, such as China, India, and Saudi Arabia, as well as the private sector creditors, and, very importantly, debtor countries.

There was an April 12th meeting of the GSDR, as we call it -- Global Sovereign Debt Roundtable -- that resulted in some tangible progress. And I should emphasize here that the GSDR is focusing on issues of process, not specific country cases. Specific country cases are being dealt with in the official creditor committees and in the negotiations between creditor and debtor. The GSDR is aiming to solve procedural and process-related issues. So, there was tangible progress in April at the meeting, and that tangible progress covered support for efforts to improve information sharing, greater clarity on the role of MDBs in the provision of net positive financing flows, and agreement on further work on comparability of treatment.

A technical group meeting took place on June 9th to deepen the work on some of these technical issues, such as cutoff dates and the use of state contingent instruments. On June 15th, there was a workshop on comparability of treatment. The GSDR deputies met on June 30^th. In September, there will be a workshop on domestic debt restructuring under the aegis of the GSDR. And in parallel, there are a number of other meetings of technical groups and deputies. And finally, the next meeting of principals will take place during the annual meetings in Marrakesh in October.

QUESTIONER: Just to follow up on that, so you said the next meeting of principals will take place in Marrakesh in October. Does that mean that there is not a meeting planned of GSDR principals to discuss GSDR at the G20 meeting next week as a forum? And is that because you do not have all of the participants there from countries who are not G20 members? And can you discuss at all whether we should be looking for anything out of the GSDR or any kind of developments with GSDR at the G20 in Gujarat next week? Thank you.

MS. KOZACK: Thanks very much. What I can say is that obviously the issue of debt and how to accelerate the process of debt restructuring is something that is of interest to global leaders. And we do expect that that will be discussed at the G20. And it was always envisaged that the next meeting of principals would take place in October at the annual meetings.

I am going to go online now.

QUESTIONER: The Egyptian government announced a few days ago an action plan for both accelerating its first phase of the IPO program and boosting its US dollar reserve. So, to what extent do you think such procedures could accelerate the completion of the first review of the EFF deal for Egypt?

MS. KOZACK: So, let me give you the update of where we stand on Egypt. On December 16, 2022, the IMF's Executive Board approved an EFF of about $3 billion US. The IMF program aims to support the authority's own reform program, which has the objectives of addressing economic vulnerabilities, restoring buffers, strengthening the social safety net, and promoting sustainable and inclusive growth and job creation.

The IMF remains engaged with the Egyptian authorities to pave the way for completion of the first review of the EFF. This includes steady implementation of the divestment strategy in introducing policies that provide for competitive neutrality for all firms to promote a level playing field and sustainably moving toward a flexible exchange rate to alleviate foreign exchange shortages.

With respect to the recently approved measures, we welcome the Egyptian authorities’ announcement that they have signed contracts to sell equity stakes in state-owned entities worth $1.9 billion US. Divestment, as I noted, is a critical component of the EFF-supported program, supporting the gradual withdrawal of the state from economic activity and providing resources for external financing and debt reduction.

The announcement constitutes important progress in implementing a key element of the comprehensive policy package aimed at restoring macroeconomic stability.

QUESTIONER: I wanted to ask you about the G20 summits. So far, under India's leadership, we are two months away from the summit. How has it done this year under India's leadership? What are the key points for that? Thank you.

MS. KOZACK: So, India's G20 presidency has been centered on the theme of one earth, one family, one future. The presidency's key priorities are enhancing financing for global public goods and strengthening macroeconomic coordination across a range of policy areas, including debt, reform of multilateral development banks, or MDDs, and digitalization. India has taken a very proactive approach toward making progress on the various G20 priorities. On debt, India has facilitated tangible progress on understanding and addressing debt vulnerabilities, including through co-chairing the GSDR, Global Sovereign Debt Roundtable, that we just talked about, and helping to find consensus on stepping up implementation of the common framework, very important for debt relief to vulnerable and low-income countries.

On digitalization, India has a world-class digital public infrastructure that it has been showcasing to other G20 members. Under India’s G20 presidency, the G20 is further developing its understanding of the opportunities and risks of digitalization, for example, in relation to the macro financial implications of crypto assets.

We are looking forward to continuing working together with India and discussing these issues, along with advancing other G20 priorities at the July G20 meetings and the Leaders’ Summit in September.

QUESTIONER: There have been talks about a BRICS currency. Does IMF have a position on it?

MS. KOZACK: Let me answer in the following way. With respect to the way countries, or the currencies in which countries conduct trade, we view that as a decision of the participants involved in the individual transactions. That is, generally, our view. With respect to a particular BRICS currency, we do not have any specific comments on this. We have not seen any specific proposal; but, perhaps, I can take the opportunity to say that more broadly. Shifts in the currency composition of reserves and of trade tend to be relatively slow moving, if we look at history; and, so, we do see some slow-moving trends that are taking place. For example, the share of the U.S. dollar in global foreign reserves has declined from around 70 percent at end 1999, to around 58 percent at end 2022.

QUESTIONER: I wanted to ask about Kenya. I think, maybe, on the Board’s meeting today but there has been a lot of protest there about various government moves. There have been issues around the salary and remuneration committee. So, I just wanted to get your update on what is happening in Kenya; and, also, if you have any response to President’s Ruto’s critique of the IMF at the meetings in Paris about basically saying there should be a global greenback, not the IMF, and that the IMF and World Bank are hostage to rich countries; and, if you can, if you have any thoughts on it? I know that the IMF has been critical of Dow’s (phonetic) decentralized autonomous organizations in the Marshall Islands, maybe elsewhere. If you have been saying anything about the end of the IMF’s thinking on that aspect of crypto?

MS. KOZACK: Thank you, Matthew. So, starting with Kenya. We have seen the reports from Kenya about the protests. We were extremely saddened to hear about the fact that some of them have turned violent and, indeed, deadly. We are monitoring the situation closely and, of course, we are hoping very much for a peaceful resolution. We do have a Board meeting planned for next week and will provide more details at that time.

With respect to the question on IMF reforms and criticisms of the IMF, I think it is useful to step back and take a longer-term perspective and, also, to remind of some of the things that we have been doing. So, first, I think, more broadly speaking, many countries and many regions of the world have navigated difficult transitions before, and the IMF has, typically, been part of that global response to these difficult transitions that countries have faced.

For example, when thinking about the pandemic, we mounted an unprecedented response to help members deal with the pandemic and shocks after the pandemic, such as that created by Russia’s invasion of Ukraine. Since March of 2020, we have approved over $300 billion in financing for ninety-six countries, including concessional lending to 57 low-income countries: and we are still seeing very high demand for IMF financing. Since Russia’s invasion of Ukraine, the IMF has approved 47 requests from 43 countries for new financing, totaling $137 billion, U.S. dollars. And we have also been changing and adapting as the world has been changing and adapting, and now we are facing a fresh set of transitions, globally, and we intend to continue to adapt and respond with agility; and this requires timely policy changes and stronger resources here at the IMF.

Let me just point to three areas, and these were highlighted in the Managing Director’s blog that was released today ahead of the G20 meetings, later this week. The overriding priority is now a prompt and successful completion of the 16th Quarter Review, increasing the overall size of the IMF’s quarter resources, which are critical to have a robust global financial safety net, particularly for countries that rely on that global financial safety net, many of whom are low-income and vulnerable countries.

This must be complemented by decisions to replenish the IMF’s concessional resources for vulnerable countries, our fully funded Poverty Reduction and Growth Trust, PRGT, and a replenished Catastrophe Containment and Relief Trust, what we call CCRT, that provides debt service relief when countries are hit by large shocks; and just as a reminder, we did deploy the CCRT during the pandemic to help provide that service relief to our low-income members.

In parallel, the IMF is also exploring reforms to our lending toolkit, including adjustments to our precautionary instruments to better suit the needs of our membership; and we are, of course, also looking at ways to better account for how climate change affects debt sustainability and to enhance our support for countries hit by climate shocks.

And, with respect to the question on the Marshall Islands, I do not have the details in front of me, but what I can say is that the IMF does not see crypto asset as an appropriate legal tender. We see crypto assets in the category of an investment that needs to be well regulated to ensure that consumer protection is in place; but we do not see it as an appropriate legal tender.

QUESTIONER: Actually, it is three questions about Africa ‑‑ about Ghana, Ethiopia, and Malawi. Is Ghana on schedule with it’s debt restructuring? You know, what conditions would the Fund withhold the second disbursement which is coming up later this year. On Ethiopia, there’s ongoing delays in Ethiopia getting this IMF program that they are after. Does that have to do with the implementation of the peace deal, is it creditor negotiations over debt relief, is it both? And then on Malawi, what is the status of Malawi’s negotiations with creditors that would take it away from the food-shock window to an ECF program? Any specific creditors holding that process up?

MS. KOZACK: On Ghana. So, the IMF’s Board approved a three-year, $3 billion Fund-supported ECF arrangement in May 2023. Six hundred million, U.S. dollars, was disbursed immediately, and the rest is expected to be dispersed in tranches every six months following program reviews. This was made possible after Ghana’s official creditor committee, under the G20 common framework, provided the necessary financing assurances in May. The program has three key objectives ‑‑ restoring macroeconomic stability, ensuring debt sustainability, and laying the foundations for higher and more inclusive growth. The program includes wide-ranging reforms to build resilience while protecting the most vulnerable.

In terms of the next steps on debt restructuring, they are for the official creditor committee to agree with the authorities on specific modalities of debt relief and for the authorities to continue to engage with their external private creditors for relief on their external debt. In the meantime, the government is finalizing the restructuring of its domestic debt. A staff team visited Accra from June 8th to 15th as part of the regular technical program engagement. The formal first review mission will take place in the fall.

And on Ethiopia. Ethiopia is a country that has been hit by multiple shocks, including six consecutive years of drought, also the pandemic, domestic conflict, and the impact of Russia’s war in Ukraine. The economic challenges for Ethiopia are significant, including food insecurity, humanitarian needs, post-conflict reconstruction, high inflation, and shortages of foreign exchange in some imported goods. We have received a request for financial assistance to help Ethiopia address these challenges. Discussions are now ongoing on the economic policies and reforms that could, potentially, be supported by an IMF program, the NEIMF Program which supports the home-grown economic reform agenda to help address macroeconomic vulnerabilities and to help unlock Ethiopia’s considerable economic potential.

A new program would also require clear commitments from development partners and financing assurances from creditors under the G20 common framework to help ensure that it can meet its objectives.

And, on Malawi, I do not have anything for you here. So, we will have to follow up, bilaterally, with you. And with that, I am going to wrap up. Thank you all very much for coming today and for joining us online. It is a pleasure to see you all here today. I wish you all a really wonderful summer. We will communicate when we are going to have the next press briefing. This briefing is embargoed until 11 a.m. The transcript will be made available on IMF.org and, of course, as usual, in case of any clarifications or additional queries, please reach out to media at IMF.org, and we will get back to you on those bilateral questions that I did not have details for you here today.