Tag: IMF
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Photo: Annual Worldbank/IMF meetings in Washington
IMF Deputy Director African Department, Mr David O. Robinson, Nigerian CBN Governor, Mr. Godwin Emefiele, Director monitoring Policy, Mr. Moses Tule, Senior Resident Representative in Nigeria African Department, Mr. Gene Leon, Alternative Executive Director Africa Group 1 Constituency, Mr. Okwu Joseph Nnanna and Director Budget Office Dr. Bright Okogu during a meeting at the 2014 Annual Worldbank/IMF Meetings in Washington DC. -
IMF reviews guidelines for sovereign bonds’ issuance
The International Monetary Fund (IMF) yesterday said it would continue to review guidelines for the issuance of Sovereign Bonds by its member countries. This, it said, would ensure that proceeds of the project are effectively deployed on projects that would benefit the citizens of the countries issuing such instruments.
The IMF Managing Director, Christine Lagarde, who spoke at the opening session of the ongoing annual conference of the IMF and the World Bank Group in Washington DC, United States (U.S.), said the reviews are aimed at ensuring that the benefits of sovereign bond are enjoyed by the economically disadvantaged population in any given country.
She regretted that the impact of growth in most developing nations has so far eluded most of the people they were originally intended for hence, the need for a comprehensive review of the conditions to boost investment in activities that could generate growth.
She said the fund would want investment in infrastructure under the right conditions to boost economic growth and job creation.
She admitted that recent bond issues by several African countries were successful, but added that future bond issues must be done in ways that are right so that it will benefit the larger part of the citizenry.
The IMF boss said the body was already working on how civil authorities in each country can effectively use public funds to serve greater interest of the people particularly, through the provision of infrastructure that affect their lives.
It would be recalled that Nigeria last year issued $1billion Euro Bond that was fully subscribed to by the global investment community.
Lagarde said the fund has done the same this year concerning sovereign debt restructuring having studied and made proposals, revisions of certain clauses of sovereign bond issuance terms stressing it would continue to work on those issues. She said the IMF was also helping the Financial Stability Board (FSB) by following up, working, monitoring, and helping with profound changes and modified regulations applicable to the financial sector.
According to her, the fund has made proposals concerning removing subsidies in a socially responsible manner including proposals concerning price setting and including externalities in the price of fossil energies.
She said: “It is also responsible in my view to assess the sustainability of growth in the light of strongly increasing inequalities becoming excessive and therefore likely to hamper growth. It is not irrelevant, either, for the IMF to look into growth and jobs and the inclusion of women in the job market. Those are areas that some might argue are not absolutely core business, and yet we contend that it is part and parcel of the mission of the IMF to look at issues that are macro critical, but touch on topics that we are facing and that in many ways can be new, or more acute.
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IMF approves $21.5b for sustainable growth
The International Monetary Fund’s (IMF) Executive Board approved $21.5 billion in financing for member countries, in addition to $220 million in concessional financing for low-income countries, the Managing Director, Christine Lagarde, has said.
She said the Board also reviewed facilities such as the Flexible Credit Line, the Precautionary and Liquidity Line, and the Rapid Financing instrument—to make sure that they continue to help countries as effectively as possible. The membership also agreed to transfer gold profits to help meet the financing needs of low-income members in the years ahead.
Her comments are contained in the IMF foreword to the institution’s Annual Report, 2014 titled, ‘From Stabilisation to Sustainable Growth, published over the weekend.
She said.since the crisis broke, the institution has provided training to all of its members and technical assistance to 90 percent of them, helping countries design, build, and strengthen the institutions that make up the building blocks of economic success. For the fourth straight year, the Fund increased its delivery of technical assistance, especially in low-income countries, and increased spending on training. Demand for technical assistance continues to be strongest in the fiscal area, but it has been growing across all regions. Over the past year, the IMF launched new tools and courses, opened a new regional technical assistance center in Ghana, and received $181 million in new donor funds.
Seven years after the onset of the global financial crisis, the world still has a way to go to secure a sustainable recovery marked by strong growth that supports rapid job creation and benefits all, International Monetary Fund (IMF) Managing Director, Christine Lagarde, has said.
“The recovery is ongoing, but it is still too slow and fragile, subject to the vagaries of financial sentiment. Millions of people are still looking for work. The level of uncertainty might be diminishing, but it is certainly not disappearing.” Ms. Lagarde said that “throughout the crisis and in the recovery period, the IMF has been, and continues to be, an indispensible agent of economic cooperation” for its membership.
The IMF has made it a priority to better integrate bilateral and multilateral monitoring and advice. The Managing Director’s Global Policy Agenda, laid out at both the Annual Meetings in 2013 and the Spring Meetings in 2014, emphasized the need to strengthen the coherence of policies and cooperation among policymakers. The priorities are clear: advanced economies need to focus on measured and well-communicated policy choices to secure the recovery; emerging markets need to strengthen their fundamentals, reduce their vulnerabilities, and step up structural reforms; and everyone needs to embrace cooperation and engage in dialogue.
In the Annual Report, Ms. Lagarde reflects on the 70th anniversary of the founding of the IMF.
“Back in 1944, global leaders were determined to put the chaos and carnage of war behind them, and build a world based on collaboration instead of conflict, integration instead of insularity. The IMF was founded on the core principle that the route to national prosperity runs through global prosperity.”
Background:
The IMF’s Annual Report 2014 is available in print in eight languages (Arabic, Chinese, English, French, German, Japanese, Russian, and Spanish), on CD-ROM (in English only), and on the Internet at www.imf.org/external/pubs/ft/ar/2014/eng
. The Annual Report web page includes the IMF’s financial statements for FY2014 and other background documentation. Copies of the Annual Report, the financial statements, and the CD-ROM are available free of charge from IMF Publication Services, P.O. Box 92780, Washington, DC 20090, online at www.imfbookstore.org or www.elibrary.imf.org, or by e-mail at publications@imf.org.
IMF COMMUNICATIONS DEPARTMENT
Public Affairs
Media Relations
E-mail:
publicaffairs@imf.org
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media@imf.org
Fax:202-623-6220Phone:202-623-7100
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IMF recommends wage freeze for Ghana
The International Monetary Fund has told Ghana during its talks on a financial assistance programme that it would like to see a freeze on public sector wages, President John Mahama said on Wednesday.
But the government has said that salary levels must take account of inflation, Mahama told Reuters on the sidelines of a conference in Dubai.
Inflation in the West African country stood at a four-year high of 15.9 percent in August. An agreement on public sector wages is seen as crucial to securing the IMF programme, which aims to restore Ghana’s fiscal balance.
“The IMF was recommending a wage freeze. I think there must be adjustments for inflation. You can’t say you’re not going to do any wage increases over the next three years. As inflation comes down, the need for higher (wage) increases reduces,” he said.
Ghana and the IMF held a first round of talks in Accra last month. A second round of talks will take place in Washington this month.
Mahama said he would like to start the three-year deal in January but if an agreement was concluded before then, it might be factored into the annual budget, which is due to be presented in November.
The IMF said last week Ghana’s fiscal problems could hit economic growth hard, as a yawning budget deficit, high inflation and a tumbling currency take their toll on one of Africa’s star economies of recent years.
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Deadly diseases and neo-liberalism
Sir,
I strongly believe that there is a strong correlation between the emergence and spread of deadly diseases in developing and developed countries and the promotion and imposition of neo-liberal policies by international economic organisations like the World Bank (WB) and the International Monetary Fund (IMF) which are funded and controlled by the capitalists in poor and backward nations.
The neo-liberalists are the ones that are concocting diseases in their laboratories in western world and spreading them around the globe so that they can create markets for the medicines, or drugs their pharmaceutical companies are producing for abnormal profit making.
When diseases became deadly, rulers in under developed countries will seek the financial and humanitarian assistance from the capitalists. The profiteers will ask them to buy drugs and injections from their companies, collect loans from their financial institutions etc. These will increase their profits and make them richer at the expense of underdeveloped economies.
Gazali Ibrahim, Kano
08035053899
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IMF team to hold talks on bailout
Discussions on an economic programme that will be supported by the International Monetary Fund (IMF) to bail the country out of its economic challenges are to be held.
A team from the IMF is expected to meet the government at the Peduase Lodge, where discussions are expected to open on the bailout negotiations.
A source at the Presidency said the government was ready to negotiate with the IMF officials and expressed optimism about the outcome, although it declined to proffer details.
The Deputy Managing Director of the IMF, Min Zhu, had earlier, in a statement, announced that the fund had received a formal request from the country to initiate discussions on an IMF support programme for Ghana.
It said: “The fund stands ready to help address the economic challenges it is facing. An IMF team will be sent in early September to initiate discussions on a programme.”
The government announced its decision to seek a bailout from the IMF to help restore stability in the economy, particularly in the areas of strengthening the local currency and reducing the fiscal deficit.
This was greeted with mixed reactions by the public, including the Minority in Parliament, who blamed the current state of the economy on gross mismanagement.
Industry stakeholders have expressed the belief that the IMF’s bailout would further burden people with economic hardships since stringent measures would have to be instituted to salvage the economy.
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IMF lowers global growth forecast
The International Monetary Fund (IMF) has lowered its forecast for global economic growth this year, from 3.7 per cent to 3.4 per cent.
The reduction reflects a weak start to the year in the United States and a number of downgrades to the outlook for several other individual economies.
However there were uplifts for some countries, the largest being the United Kingdom, the BBC reports.
The global forecast for 2015 is unchanged, with growth predicted to be four per cent.
Several countries do receive an upgrade and the largest for 2014 is for the UK – from a 2.8 per cent to a 3.2 per cent expansion of the economy.
It is the latest in a string of upgrades from the IMF and others.
There is a smaller uplift to the IMF forecast for the UK for next year.
Introducing the new forecasts, the IMF’s chief economist, Olivier Blanchard, said: “The recovery continues, but it remains a weak recovery, indeed a bit weaker than we forecast in April.”
Nonetheless he said that the headline – the revision for this year – “makes things look worse than they really are.”
That is because, he said, “it largely reflects something that has already happened.”
The weakness at the beginning of 2014 in the U.S – the economy contracted sharply in the first three months – will affect the figure for the whole year.
That was due to bad weather and firms meeting demand by running down stocks of goods to a greater extent than had been expected.
There were downward revisions for several emerging economies, with the largest being for Russia, reflecting what the IMF calls “geopolitical tensions.”
That country’s growth projection for this year is now just 0.2 per cent, a downgrade from the previous World Economic Outlook forecast of 1.3 per cent.
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IMF warns over Argentina ruling
The International Monetary Fund (IMF) has warned that Argentina’s legal defeat in its fight against hedge fund investors may have wider implications.
On Monday, a US Supreme Court ruling sided with bondholders demanding Argentina pay them $1.3billion (£766million).
The IMF said it was concerned about “broader systemic implications”.
Meanwhile the ratings agency S&P cut Argentina’s credit rating, warning the ruling made it more likely that the country would default.
“The Argentine government has limited capacity to pay the plaintiff creditors while servicing its current debt”, S&P said.
S&P reduced the credit rating by two notches from “CCC+” to “CCC-”.
The move theoretically makes it more expensive for Argentina to borrow money. However, the country has been unable to raise funds on the international market since its 2001-02 debt default.
Argentina’s Economy Minister, Axel Kicillof, said the government was “starting to take steps” to restructure the debt under Argentine law – as a way of avoiding complying with the US order.
In a press conference Mr Kicillof said this would allow the country to honour its commitments with those creditors who had accepted the initial agreement.
Argentina has agreed a restructuring with the bulk of investors holding its defaulted debt, but the so-called “hold-outs” have been fighting for 100 per cent of the value.
Mr Kicillof added that he would be sending lawyers to speak to the US judge behind the ruling, Thomas Griesa.
On Monday President Cristina Fernandez de Kirchner said her country would not bow to “extortion”, in a reference to the court’s ruling. She urged people to “remain tranquil” in the days ahead.
This realistically is the end of the road for Argentina’s decade-long fight”
End Quote The Supreme Court rejected Argentina’s appeal against an order to pay the full value of bonds that some hedge funds bought after the country defaulted more than a decade ago.
Also, the bondholders won the right to use the US courts to force Argentina to reveal where it owns assets around the world. The court’s decision means that bondholders should find it easier to collect their debts.
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Banks have more duties than keeping inflation low, says IMF
Central bankers around the world may have to take financial stability into greater account, in addition to their usual duties of keeping inflation low while maintaining close cooperation with each other, the Managing Director, International Monetary Fund (IMF), Christine Lagarde, has said.
“We need to continue to strive for improved prudential frameworks for the financial sector so as not to overburden monetary policy,” she said in prepared remarks to a conference in Portugal.
“But where macroprudential policies fall short, monetary policy will have a larger role than in the past to maintain financial stability,” she added.
Citizens across 21 European Union (EU) countries have the chance Sunday to elect their direct representatives to Brussels in a vote likely to affect the bloc’s future beyond the European Parliament’s five-year mandate.
Ms. Lagarde acknowledged that a greater role in financial stability could pose a challenge to central bank independence, given the ambiguous nature of how to define these types of matters. One response would be to maintain the focus on keeping inflation low, while also considering steps such as maintaining monetary policies and those to ensure financial stability housed in different institutions.
Ms. Lagarde’s speech opened a two-day conference sponsored by the European Central Bank in the ocean-side town of Sintra near Portugal’s capital. The conference has gathered policy makers from central banks and other international bodies as well as top academic economists, making it many ways the ECB’s version of the Kansas City Federal Reserve’s annual conference in Jackson Hole, Wyo.
The IMF has in recent weeks urged the ECB to weigh more aggressive policy measures to combat the risks of too low inflation, or as the IMF has dubbed it, “lowflation.” Major central banks typically target inflation rates around two per cent. The problem occurs when it softens too far below that: debts become harder to finance for households, businesses and even governments, weighing on spending and investment.
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Mali cash delayed over questionable jet purchase
The International Monetary Fund (IMF) says it will delay the disbursement of $6 million in aid to Mali pending a clarification from the government on the purchase of a $40 million presidential jet, its spokesman said.
The controversy over the jet, and a separate loan for military supplies, risks undermining confidence in Mali’s donor-backed recovery from twin crises in 2012. These involved the military ouster the president and the occupation of its vast northern desert regions by al Qaeda-linked Islamist fighters.
The IMF spokesman said the organisation questions the rationale of and procedures that led to Mali buying the jet, given the country’s pledges to fight poverty.
The IMF has also flagged concerns about a separate 100 billion CFA franc ($209.02 million) state guarantee issued for a loan secured by a private company with a Malian bank to provide supplies for the army.
“Getting satisfactory information about these transactions and reassurance that the authorities still stand behind the fiscal stability and sound public financial management practices objectives of their arrangement with the IMF will take time,” the spokesman said.
The process will slow the first review of its post-war aid package and a $6 million disbursement due in June will be delayed, the spokesman added.
Mahamadou Camara, Mali’s communications minister, said it was normal for the IMF to seek clarifications, but added the government did not appreciate the manner in which it was done.
The country’s finance minister had provided explanations to IMF chief Christine Lagarde at meetings in Washington in April, Camara told French broadcaster RFI.
French troops scattered Islamists in an offensive last year, but the country’s recovery has been slow. The IMF slashed its estimates for economic growth last year to 1.7 percent, down from 4.8 percent, because of poor rainfall and a weak harvest.
The IMF agreed a $46 million financial aid package for Mali in December to help with its balance of payments and restore economic growth.