Category Archives: IMF

Christine Lagarde

Statement by IMF Managing Director Christine Lagarde at the Conclusion of her visit to South Africa

Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), issued the following statement today in Pretoria at the conclusion of her visit to South Africa:

“I wish to thank President Ramaphosa, Governor Kganyago, who is also the IMFC Chairman, as well as Minister Patel, Minister Davies and other senior officials for their warm hospitality and our productive exchange of views during my visit to Pretoria. I would also like to express my gratitude to all stakeholders with whom I met, including women leaders, youth leaders, and civil society.

“South Africa has immense economic potential, including a young and dynamic population. The country has made substantial progress over the past quarter of a century, achieving much improved living standards for its citizens. There is a lot to be proud of.

“At the same time, South Africa is at crossroads. The country faces challenges to raise growth and create more jobs, particularly for the youth. It also needs to address the too-high levels of unemployment, poverty, and inequality.

“It is thus urgent to advance broad-based, albeit at times difficult, reforms to reignite growth and ensure that all South Africans share the benefits, irrespective of their race, age, or gender. And this needs to be done in the context of a very challenging external environment for emerging markets that calls for increased vigilance and rebuilding of policy buffers.

“Policy actions are needed to reignite inclusive growth. An important reform relates to fostering competition in the economy to attract private investment. There is also a need to strengthen public finances to stabilize debt at more comfortable levels by making expenditure more efficient, growth-friendly, and inclusive.

“Additionally, improving the operational efficiency and financial situation of state-owned enterprises to raise competitiveness and contain fiscal risk is essential. Finally, improving financial inclusion and continuing to identify and address corruption through increased transparency and accountability, and the rule of law, are also priorities.

“I agreed with the authorities to enhance the excellent policy dialogue that we have together.

“Once again, I would like to thank the government and people of South Africa for their warm welcome”.

International Monetary Fund

Statement by IMF First Deputy Managing Director David Lipton on Meeting with Egypt’s President

Following a meeting with Egypt’s President Abdel Fattah El Sisi in Cairo today, Mr. David Lipton, First Deputy Managing Director of the International Monetary Fund (IMF), issued the following statement:

“President El Sisi and I discussed Egypt’s economic outlook and progress in Egypt’s reform program supported by the IMF. The reforms have started to reap results, especially with regard to Egypt’s macroeconomic stabilization: growth is at the highest rate since 2008, inflation has rapidly declined, foreign exchange reserves are at record levels, exports are growing and unemployment has declined.

“We also discussed the outcome of the Inclusive Growth and Job Creation Conference [link to the PR announcing the conference], co-organized by the Egyptian authorities and the IMF in Cairo May 5-6. I was encouraged by the determination, shared by policy makers, the private sector, members of the parliament and civil society. There was consensus that Egypt needs to lock in the gains in macroeconomic stabilization and shift gears towards the implementation of a home-grown structural reform agenda to achieve more inclusive and private sector-led growth. This will help create jobs, which is the best way to reduce poverty and improve living standards. In this context, the conference also benefited from the participation of former senior policymakers from Korea, India and Malaysia who shared their reform experiences.

“I thanked President El Sisi, Prime Minister Sherif Ismail, Governor of the Central Bank of Egypt Tarek Amer and the Minister of Finance Amr El Garhy for co-hosting the conference. As we continue our partnership, we stand ready to help Egypt achieve a better future for its people.”

Christine Lagarde

IMF Managing Director Christine Lagarde Calls for G20 Policies to Make Growth More Resilient and More Widely Shared

Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), issued the following statement today at the conclusion of the Group of 20 (G20) Finance Ministers and Central Bank Governors Meeting in Buenos Aires, Argentina:
“As we conclude this G20 Finance Ministers and Central Bank Governors meeting—the first under Argentina’s leadership—the global economic recovery has continued to strengthen, with growth momentum now involving more than 80 percent of total G20 GDP. This provides for very welcome jobs growth and room to undertake important reforms. As I have said before, we should fix the roof while the sun shines.
“Reform is all the more important because the cyclical forces carrying current growth will eventually wane and medium-term prospects remain weak, especially in advanced economies. Beyond the short term, risks are accumulating—for example, debt levels are high in advanced economies and continue to increase in many emerging market and low-income countries; and global imbalances persist—and could be exacerbated by the policy mix in some of the major economies.
“In my discussions over the past two days, I have emphasized that now is an opportune moment to implement reforms to make growth more solid, sustainable, balanced, and inclusive. I joined others in reiterating that we should avoid the temptation of inward-looking policies and, rather, work together to reduce trade barriers and resolve trade disagreements without resorting to exceptional measures.
“I also emphasized the importance of addressing the buildup of debt in the public and private sectors, following a long period of easy financial conditions. This creates financial vulnerabilities,especially as monetary conditions tighten. To mitigate these risks, countries should take advantage of the current momentum by building fiscal buffers—creating more room to act in the next downturn—and by making active use of macro- and microprudential policies. Flexible exchange rates can help mitigate external shocks.
I welcome the G20’s continued vigilance of capital flows and its call to enhance the transparency of low-income countries’ debt by both debtors and creditors. The IMF is looking forward to contributing to these important work streams, amongst others.
“Our discussions in Buenos Aires focused on a range of other issues that are key to lifting productivity and making growth more resilient and more widely shared. These included the future of work,in the light of rapid technological change; international tax challenges, particularly related to digitalization and transparency; the opportunities and challenges posed by Fintech and Crypto-assets; and efforts to close the global infrastructure gap.
In all these areas, international cooperation is essential. The IMF, for example, is working with other institutions through the Platform for Collaboration on Tax to help developing countries mobilize revenue to achieve the Sustainable Development Goals. I am also encouraged that the G20 Ministers and Governors reaffirmed their commitment to a strong, quota-based, and adequately resourced IMF at the center of the global financial safety net.
“Finally, I would like to thank the Argentine authorities for their excellent organization and effective leadership of this G20 meeting. I applaud the resolute reforms implemented by President Macri during the first years of his administration to address economic imbalances and to reintegrate Argentina into the global financial and monetary system. I look forward very much to returning to Argentina for the next G20 meetings in July and November.”

International Monetary Fund

Germany and IMF Strengthen Capacity Development Cooperation in Africa

The IMF welcomes Germany’s commitment to strengthening its collaboration with the IMF on capacity development. Wolfgang Schäuble, Germany’s Federal Minister of Finance and Christine Lagarde, Managing Director of the International Monetary Fund (IMF), today signed a Letter of Understanding whereby the German Ministry of Finance will provide €15 million in support of the IMF’s capacity development activities across Africa in the context of the G-20 Compact with Africa.

The Compact with Africa is an initiative launched under Germany’s G-20 Presidency in December 2016 and aims to boost private investment and increase infrastructure development in Africa.

Resilient macroeconomic institutions are critical for attracting more foreign direct investment. IMF capacity development supports African policymakers’ efforts to address reform challenges in areas such as strengthening domestic resource mobilization, implementing fair tax systems, achieving good financial governance, and fostering financial stability and inclusion, in support of 2030 Agenda for Sustainable Development.

Initially, five countries are joining the Compact with Africa: Cote d’Ivoire, Morocco, Rwanda, Senegal, and Tunisia, with another group of countries expected to join later this year.

Germany’s Federal Finance Minister Wolfgang Schäuble commented: “Capacity development is important to improve conditions for private investment in Africa. This is why we support the IMF’s very valuable efforts both financially and conceptually.”

IMF Managing Director Christine Lagarde made the following statement at the signing ceremony: “I want to commend the German government for making the Compact with Africa a G20 priority this year. This compact has the potential to mobilize investment and energize inclusive economic growth in Africa. The IMF greatly appreciates the support of the German government for our capacity-building efforts in Africa and we are very pleased to participate in this important initiative.”

International Monetary Fund

IMF Executive Board Adopts Decisions to Strengthen the Financial Stability in Countries with Islamic Banking

The Executive Board of the International Monetary Fund (IMF) held its first formal discussion on Islamic banking (IB), and adopted a set of proposals on the role that the Fund should play in this area. These proposals, and the case for adopting them, are contained in the staff paper “Ensuring Financial Stability in Countries with Islamic Banking” and the accompanying country case studies paper.

IB continues to grow rapidly, in size and complexity, contributing to financial deepening and inclusion in many countries, but also posing a challenge to supervisory authorities and central banks. While accounting for a small share of global financial assets, IB has established a presence in more than 60 countries and has become systemically important in 14 jurisdictions. IB involves operations, balance sheet structures, and risks that differ from their conventional banking counterparts. Accordingly, there is a need for putting in place an environment that promotes IB financial stability and sound development, including legal, prudential, financial safety nets, anti-money laundering and countering the financing of terrorism, and liquidity management frameworks.

The IMF has been providing technical advice, as needed, to member countries on IB issues for the past 20 years and has been cooperating with relevant standards setters and international organizations on efforts to develop supplementary standards for IB in areas that are not covered by existing international standards. In recent years, the number and complexity of IB issues arising during IMF country surveillance and the demand for policy advice and capacity development in this area have increased, requiring a more formal IMF involvement.

Executive Board Assessment

Executive Directors welcomed the opportunity to consider the staff’s proposals to strengthen the Fund’s engagement on Islamic banking and related financial stability implications. Directors concurred that Islamic banking presents an opportunity for many member countries to enhance financial intermediation and inclusion and mobilize funding for economic development. At the same time, they noted that the growth of Islamic banking and its complexities pose new challenges and unique risks for regulatory and supervisory authorities. Against this background, Directors called for stronger efforts to establish a policy framework and environment that promote financial stability and sound development of Islamic banking, particularly for countries in which Islamic banking has become systemically important.

Directors expressed support for staffs proposed approach to developing and providing policy advice on Islamic banking-related issues in the context of Fund surveillance, program design, and capacity development activities. They also called for staff’s continued support to the work of the relevant international standard setters and other international bodies to help address current gaps in the international regulatory framework for Islamic banking. Directors saw merit in considering a proposal to formally recognize the “Core Principles for Islamic Finance Regulation for Banking,” prepared by the Islamic Financial Services Board, as a standard under the Fund/Bank Standards and Codes Initiative. They looked forward to receiving a formal proposal for Board endorsement in the context of a forthcoming paper before end-April 2018.

Directors welcomed the progress that has been made in developing legal and governance frameworks, and regulatory and supervisory standards for Islamic banking, to complement the international norms and standards that apply beyond Islamic banks. Building on the progress made, Directors called for full implementation and consistent application of the standards, and for strengthening supervisory capacity with respect to Islamic banking.

Directors emphasized the importance of having in place robust Islamic banking-specific resolution regimes and other financial safety nets for countries in which Islamic banking operates. Noting the slow progress achieved in these areas, they underscored the importance of additional work in collaboration with relevant international bodies on the design of legal regimes and institutional arrangements for effective Islamic banking resolution, deposit insurance schemes and AML/CFT, as well as adapting the conventional lender-of-last-resort framework to cover Islamic banking.

Directors agreed that the availability of high-quality liquid assets for Islamic banking is important for effective liquidity management and financial stability, and for the sustainable development of the Islamic banking industry. In this context, they called for increased efforts to deepen the government Sukuk markets. Directors also noted the importance of having in place relevant central banking liquidity facilities and instruments.
Directors agreed that the emergence in recent years of hybrid financial products in Islamic banking, which replicate the relevant aspects of conventional finance, may have brought some benefits, but also raise financial stability concerns. Such concerns include the emergence of new complex risks, the applicability of existing prudential regimes, governance and consumer protection concerns, and reputational risk. Directors encouraged additional work, by staff and other relevant international bodies and standard setters, to better understand the nature of these activities and how they can be effectively regulated.

Managing Director of the International Monetary Fund (IMF)

IMF Managing Director Christine Lagarde Congratulates Antonio Guterres on Appointment as UN Secretary General

Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), issued the following statement today:
“I would like to express my wholehearted congratulations to Antonio Guterres for his selection today by the General Assembly to serve as the ninth Secretary-General of the United Nations. His proven leadership, both within and outside the United Nations system, and extensive experience in international relations will be vital for the United Nations in rising to meet the many challenges it faces and in supporting member states achieve the 2030 Sustainable Development Goals.

“I look forward to working with him in the years to come and enabling a continued strong and effective partnership between the IMF and the United Nations.”

International Monetary Fund

IMF Managing Director Christine Lagarde Appoints Abebe Aemro Selassie as Director of the IMF’s African Department

Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), today announced her intention to appoint Abebe Aemro Selassie as Director of the IMF’s African Department. Mr. Selassie succeeds Antoinette Sayeh whose departure was announced previously. He is expected to begin his work in this capacity on September 19, 2016.

“Abe brings a profound understanding of the challenges facing Africa, having worked closely with policymakers from across the region for much of his career. His proven ability to provide intellectual leadership, track record of building collaborative relationships, analytical depth, and warm collegiality make him ideally placed to lead the IMF’s work with our membership in sub-Saharan Africa. Having had the opportunity to work with Abe over the last five years, I have been struck by his sound judgement, integrity, and commitment to teamwork,” Ms. Lagarde said.

Mr. Selassie’s career has spanned the private sector, government, and the IMF. During his time in the IMF’s African Department, he was senior resident representative in Uganda, served as mission chief for South Africa, led work on the Regional Economic Outlook, and worked in various roles on countries ranging from Cote D’Ivoire, Ghana, and Kenya, to Burkina Faso, Guinea, Liberia, and Sierra Leone. Most recently, Mr. Selassie oversaw the IMF’s effort to assist the three Ebola-stricken countries.

Mr. Selassie also brings extensive operational and policy experience from his assignments in other IMF departments, including the Strategy, Policy and Review Department and the European Department. He worked on Turkey and Poland between 1999 and 2003, and was Assistant Director and mission chief for Portugal during the Eurozone crisis. He has also worked on low-income country and emerging-market program and policy design issues.

Before joining the IMF, Mr. Selassie worked for the Economist Intelligence Unit, specializing in sovereign credit risk issues, and then for the Ethiopian government as Principal Economist in the Office of the President. He holds a B.A. in Economics from City of London Polytechnic and a Masters in Economic History from London School of Economics.

“The IMF remains deeply committed to serving our members in Africa. Abe will bring a unique blend of extensive knowledge and experience to his new position as Director of the African Department,” Ms. Lagarde said.

Statement by IMF Managing Director Christine Lagarde at the Conclusion of her Visit to Lao P.D.R.

Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), issued the following statement today at the conclusion of her visit to Lao P.D.R.:

“I wish to thank Prime Minister Thongloun Sisoulith, Deputy Prime Minister and Minister of Finance Somdy Douangdy and Central Bank Governor Somphao Phaysith and other senior government officials for their warm hospitality and fruitful exchange of views during my visit to Laos.

“During my stay, I attended the ASEAN Business and Investment Summit on ASEAN Economic Development Perspectives and met with ASEAN Heads of State, as well as government officials from Lao P.D.R.

“ASEAN has growing economic and strategic importance, being located in a region featuring ample natural resources and emerging middle classes. ASEAN has achieved rapid rates of growth of around 5 percent in recent years through a shift to domestic-led growth, while maintaining open markets and continuing gradual regional integration. However, while growth, structural transformation, and regional integration are all ongoing, convergence in real per capita incomes has been slowing, both within ASEAN and between ASEAN and advanced countries. To foster further real income convergence, ASEAN countries need to implement growth-supporting monetary and countercyclical fiscal policies with more flexible exchange rates to help manage risks from financial volatility and subsidy reforms. Increased and evenly distributed infrastructure spending together with enhanced legal frameworks for private participation are also key as well as the strengthening of public education systems. Developing deep domestic financial markets, building resilience and expanding financial access should also be a priority.

“Lao P.D.R.’s economic growth also has been impressive but domestic and external vulnerabilities remain. To safeguard macroeconomic stability during the transition out of low-income country status, it will be important to maintain the momentum of fiscal consolidation to reduce public debt and diversify the economy. Implementing fiscal reforms including on tax policy and administration, public financial and debt management will make the public sector more efficient. Continued investments in education and health will set the conditions for productivity growth and export diversification, while distributing the benefits more widely. It will also be necessary to continue to accumulate international reserves and address weaknesses in the banking system and improve supervision. These actions will help the Lao P.D.R. economy continue its path of robust growth in a sustainable and stable manner.”

“Once again, I would like to thank the authorities and the people of Lao P.D.R. for their hospitality and look forward to continuing our close cooperation.”

High Level Seminar: The Energy Transition, NDCs, and the Post-COP21

By OCP Policy Center, International Monetary Fund and the Center on Global Economic Governance at Columbia University

The International Monetary Fund (IMF), the Center on Global Economic Governance (CGEG), part of Columbia University’s School of International and Public Affairs, and OCP Policy Center will hold a High Level Seminar, supported by the COP22 Scientific Committee, under the theme of “The Energy Transition, NDCs, and the Post-COP21” on September 8th and 9th, 2016 at the Sofitel hotel in Marrakech, Morocco.

In preparation of the upcoming COP22 event, the objectives of this high level seminar are to define the long term goals for the struggle against climate change, and to share perspectives on the actions to undertake to make climate agreements credible, with a focus on the strategies that would ensure their implementation.

Two full days will bring together speakers and participants to contribute to discussions around the adoption of carbon pricing, the respective roles for adaptation and mitigation in the climate change discussion, as well as the role of transparency and accountability in achieving climate change alleviation goals. Climate Finance will also be discussed as it is becoming one of the key solutions to fight climate change, as major financial investments are required to transition the world’s economy to a low-carbon path, reduce greenhouse gas concentration to safe levels, and build the resilience of vulnerable countries to climate change. In terms of energy transition, the debates will bring elements of response to the following key questions: where does the energy transition stand; what are the transitional risks; how to evaluate the right energy price and how to make the energy transition contribute to economic development? Finally, experts will explore how policy makers should deal with uncertainty.

The Seminar will gather distinguished personalities from international organizations, research institutes and academia, as well as selected professionals in policy and business to push forward reflection on these issues.

About OCP Policy Center
The OCP Policy Center is a Moroccan policy-oriented think tank striving to promote knowledge sharing and to contribute to an enriched reflection on key economic and international relations issues. By offering a southern perspective on major regional and global strategic challenges facing developing and emerging countries, the OCP Policy Center aims to provide a meaningful policy-making contribution through its four research programs: Agriculture, Environment and Food Security, Economic and Social Development, Commodity Economics and Finance, Geopolitics and International Relations. On this basis, we are actively engaged in public policy analysis and consultation while promoting international cooperation for the development of countries in the southern hemisphere. In this regard, the OCP Policy Center aims to be an incubator of ideas and a source of forward thinking for proposed actions on public policies within emerging economies, and more broadly for all stakeholders engaged in the national and regional growth and development process. For this purpose, the Think Tank relies on independent research and a solid network of internal and external leading research fellows.

About IMF
The International Monetary Fund (IMF) is an organization of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. Created in 1945, the IMF is governed by and accountable to the 189 countries that make up its near-global membership.

About the Center on Global Economic Governance at Columbia University
The Center on Global Economic Governance (CGEG) was created with the recognition that without adequate global economic governance there is a greater possibility of major crises and a tendency toward protectionism and political upheaval. It is our mission to develop, promote and implement new theories, studies and policy initiatives that cut across nation-state boundaries and address this new reality. The goal for CGEG is hence to become a premier Center for producing a new wave of policy-oriented research on global economic governance, stress excellence and recognition, and achieve visibility and impact. In doing so, CGEG will bring critical issues into sharp focus, set the highest academic standards in research, and bring together key players from the academic, policy, and business world.

International Monetary Fund

IMF Launches Japan-Funded Project to Improve External Sector Statistics in Central and West African Countries

The International Monetary Fund (IMF) launched on August 29, 2016 a three-year capacity development project to improve the external sector statistics in Central and West Africa. Introduced at the African Training Institute (ATI) in Mauritius, this project has been made possible by the generous support of the Government of Japan. Its opening workshop at the ATI brought together mid– and senior–level central bank officials of 17 Francophone beneficiary countries.[1] Representatives of the Central Bank of West African States (BCEAO) and of the Bank of Central African States (BEAC) also participated in the workshop.

The project aims to enhance external sector statistics quality and close data gaps in key areas such as balance of payments statistics, the international investment position, and external debt statistics. It will support beneficiary countries’ efforts to improve the accuracy, timeliness, comparability, and reliability of external sector statistics for better policy analysis and economic decision-making, thereby also informing IMF surveillance. The project will also facilitate greater regional economic integration in the CEMAC and the WAEMU regions.

Mr. Louis Marc Ducharme, Director of the IMF’s Statistics Department, emphasized: “Timely and high-quality external sector statistics are essential for policymakers at both the national and regional levels to better understand countries’ external positions, risks and vulnerabilities as a basis for designing and implementing sound macroeconomic policies. The project will provide the participants with opportunities to discuss common challenges, share experiences, and promote peer-to-peer learning, with a view to enhancing their external sector statistics.”

Mr. Vikram Punchoo, Second Deputy Governor of the Bank of Mauritius, said at the opening ceremony: “Recently, Mauritius benefited also from a similar project. As a result, the Bank of Mauritius further improved the coverage of the balance of payments statistics and started the compilation of its international investment position and external debt. The project also facilitated the authorities’ subscription to the Special Data Dissemination Standard in 2012.”