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  •  The finance minister said they are trying their best to improve Pakistan s condition under Prime Minister Shehbaz Sharif s leadership Finance Minister Ishaq Dar on Friday said Pakistan is the only country founded in the name of Islam and Allah is responsible for its development and prosperity as the cash strapped nation faced an acute balance of payments crisis Addressing the inauguration ceremony of the Green Line Express Train service here the senior Pakistan Muslim League Nawaz PML N leader said that he had full faith that Pakistan would progress because it was created in the name of Islam If Allah can create Pakistan then He can also protect develop and make it prosper Dar said The finance minister said they are trying their best to improve Pakistan s condition under Prime Minister Shehbaz Sharif s leadership Dar reiterated the incumbent government inherited several problems from the previous government led by Imran Khan adding the government was working day and night The team is trying to improve the situation ahead of the elections He said the country is still suffering due to the drama that started five years ago and insisted that the economy was strong during former prime minister Nawaz Sharif s tenure from 2013 2017 The finance minister claimed that Pakistan Stock Exchange was the best performing capital market in South Asia and ranked fifth in the world during Nawaz Sharif s era and the sights of the world institutions were set on it Dar said that Pakistan was now paying the price for the Panama drama the ouster of the PML N government and similar issues it faced over the last five years Pakistan was on the growth track during Nawaz s tenure but it was derailed he said People can see the destruction the country suffered in the last five years and they know who has delivered in the past Dar added Facing an acute balance of payments crisis Pakistan is desperate to secure much needed external financing with less than three weeks worth of import cover in its foreign exchange reserves which fell USD 923 million to USD 3 68 billion Pakistan secured a USD 6 billion IMF bailout in 2019 It was topped up with another USD 1 1 billion in 2022 to help the country following the unprecedented floods But the IMF suspended disbursements in November due to Pakistan s failure to make more progress on fiscal consolidation amidst political turmoil in the country Meanwhile the Washington based global lender announced on Thursday that it was sending a staff mission to Islamabad this month to discuss resuming the bailout programme Despite repeated claims by the finance minister who replaced Miftah Ismail to bring the dollar rate under Rs 200 the greenback surged to a record high of Rs 268 30 in the interbank market The Pakistani rupee extended its downward trend on Friday with the local currency plunging over Rs 12 against the US dollar in the interbank market as the government eased its control over the currency in order to convince the International Monetary Fund IMF to release pending loan tranche The local unit was trading at Rs 268 30 compared to Thursday s close of Rs 255 43 in the interbank market Credit https www outlookindia com business allah is responsible for pakistan s development says pak finance minister news 257311
    Allah Is Responsible For Pakistan’s Development, Says Pak Finance Minister 
     The finance minister said they are trying their best to improve Pakistan s condition under Prime Minister Shehbaz Sharif s leadership Finance Minister Ishaq Dar on Friday said Pakistan is the only country founded in the name of Islam and Allah is responsible for its development and prosperity as the cash strapped nation faced an acute balance of payments crisis Addressing the inauguration ceremony of the Green Line Express Train service here the senior Pakistan Muslim League Nawaz PML N leader said that he had full faith that Pakistan would progress because it was created in the name of Islam If Allah can create Pakistan then He can also protect develop and make it prosper Dar said The finance minister said they are trying their best to improve Pakistan s condition under Prime Minister Shehbaz Sharif s leadership Dar reiterated the incumbent government inherited several problems from the previous government led by Imran Khan adding the government was working day and night The team is trying to improve the situation ahead of the elections He said the country is still suffering due to the drama that started five years ago and insisted that the economy was strong during former prime minister Nawaz Sharif s tenure from 2013 2017 The finance minister claimed that Pakistan Stock Exchange was the best performing capital market in South Asia and ranked fifth in the world during Nawaz Sharif s era and the sights of the world institutions were set on it Dar said that Pakistan was now paying the price for the Panama drama the ouster of the PML N government and similar issues it faced over the last five years Pakistan was on the growth track during Nawaz s tenure but it was derailed he said People can see the destruction the country suffered in the last five years and they know who has delivered in the past Dar added Facing an acute balance of payments crisis Pakistan is desperate to secure much needed external financing with less than three weeks worth of import cover in its foreign exchange reserves which fell USD 923 million to USD 3 68 billion Pakistan secured a USD 6 billion IMF bailout in 2019 It was topped up with another USD 1 1 billion in 2022 to help the country following the unprecedented floods But the IMF suspended disbursements in November due to Pakistan s failure to make more progress on fiscal consolidation amidst political turmoil in the country Meanwhile the Washington based global lender announced on Thursday that it was sending a staff mission to Islamabad this month to discuss resuming the bailout programme Despite repeated claims by the finance minister who replaced Miftah Ismail to bring the dollar rate under Rs 200 the greenback surged to a record high of Rs 268 30 in the interbank market The Pakistani rupee extended its downward trend on Friday with the local currency plunging over Rs 12 against the US dollar in the interbank market as the government eased its control over the currency in order to convince the International Monetary Fund IMF to release pending loan tranche The local unit was trading at Rs 268 30 compared to Thursday s close of Rs 255 43 in the interbank market Credit https www outlookindia com business allah is responsible for pakistan s development says pak finance minister news 257311
    Allah Is Responsible For Pakistan’s Development, Says Pak Finance Minister 
    General news3 days ago

    Allah Is Responsible For Pakistan’s Development, Says Pak Finance Minister 

    The finance minister said, "they are trying their best to improve Pakistan's condition under Prime Minister Shehbaz Sharif's leadership"

    Finance Minister Ishaq Dar on Friday said Pakistan is the only country founded in the name of Islam and Allah is responsible for its development and prosperity, as the cash-strapped nation faced an acute balance of payments crisis.

    Addressing the inauguration ceremony of the Green Line Express Train service here, the senior Pakistan Muslim League-Nawaz (PML-N) leader said that he had full faith that Pakistan would progress because it was created in the name of Islam.

    "If Allah can create Pakistan then He can also protect, develop, and make it prosper," Dar said.

    The finance minister said, "they are trying their best to improve Pakistan's condition under Prime Minister Shehbaz Sharif's leadership".

    Dar reiterated the incumbent government inherited several problems from the previous government led by Imran Khan, adding, the government was working day and night.

    "The team is trying to improve the situation ahead of the elections."

    He said the country is still suffering due to the "drama" that started five years ago and insisted that the economy was strong during former prime minister Nawaz Sharif's tenure from 2013-2017.

    The finance minister claimed that Pakistan Stock Exchange was the best-performing capital market in South Asia and ranked fifth in the world during Nawaz Sharif's era and the sights of the world institutions were set on it.

    Dar said that Pakistan was now paying the price for the "Panama drama", the ouster of the PML-N government, and similar issues it faced over the last five years."Pakistan was on the growth track during Nawaz's tenure, but it was derailed," he said.

    "People can see the destruction the country suffered in the last five years, and they know who has delivered in the past," Dar added.

    Facing an acute balance of payments crisis, Pakistan is desperate to secure much-needed external financing, with less than three weeks' worth of import cover in its foreign exchange reserves, which fell USD 923 million to USD 3.68 billion.

    Pakistan secured a USD 6 billion IMF bailout in 2019. It was topped up with another USD 1.1 billion in 2022 to help the country following the unprecedented floods. But the IMF suspended disbursements in November due to Pakistan's failure to make more progress on fiscal consolidation amidst political turmoil in the country.

    Meanwhile, the Washington-based global lender announced on Thursday that it was sending a staff mission to Islamabad this month to discuss resuming the bailout programme.

    Despite repeated claims by the finance minister, who replaced Miftah Ismail, to bring the dollar rate under Rs 200, the greenback surged to a record high of Rs 268.30 in the interbank market.

    The Pakistani rupee extended its downward trend on Friday with the local currency plunging over Rs 12 against the US dollar in the interbank market as the government eased its control over the currency in order to convince the International Monetary Fund (IMF) to release pending loan tranche.

    The local unit was trading at Rs 268.30 compared to Thursday's close of Rs 255.43 in the interbank market.

    Credit: https://www.outlookindia.com/business/allah-is-responsible-for-pakistan-s-development-says-pak-finance-minister--news-257311

  •   The recent strengthening of the Ghanaian exchange rate provides some useful insight into what could happen to the Nigerian exchange rate if the stars align Ghana has seen its exchange rate rally by more than 25 since announcing a landmark 3 billion bailout deal with the IMF earlier in the week Cedis gained 15 on Thursday trading around 9 1 last check The currency s performance in the past week is seen to have been boosted by the IMF deal news meaning the country gets much needed liquidity to meet its foreign currency demands Ghana reported that its inflation rate exceeded 50 in November triggering another potential short term interest rate hike However we believe that the 3 billion IMF deal will help reduce the rate of inflation that most Ghanaians believe has been driven by exchange rate depreciation Nigeria is experiencing the same economic challenges as Ghana with an inflation rate of 21 47 the highest in over two decades Like Ghaha the rate of inflation is influenced by massive currency depreciations experienced on the black market Nigeria s exchange rate between its naira and the dollar depreciated to N850 1 in early Novemberand at some point analysts feared that it could fall to as low as N1000 1 At the end of the year The news continues after this announcement Since then the exchange rate appears to have settled on an anchor price of around N750 1 which suggests that the volatility experienced in the last three months has reduced Ghana s exchange rate experience influenced by the IMF deal news heralds an important lesson for currency speculators in Nigeria The exchange rate between the naira and the dollar can strengthen in a matter of days just because of a policy change or Nigeria strikes a major deal for a soft loan Nairametrics also believes there are a number of actions that could lead to a stronger naira in the short to medium term just as the cedis has strengthened Interest rate cooling A possible cooling off of an interest rate hike by the US Fed early next year is also a likely boost for Ghana and other emerging markets such as Nigeria The news continues after this announcement The US Federal Reserve voted earlier in the week to raise its interest rates by half a percentage point But the recent drop in the country s inflation rate suggests the Fed may start to wind down some of its interest rate hikes If this happens Nigeria is likely to benefit from this as most of the portfolio outflows experienced in the last two years could be reversed eurobonds The increase in Nigerian Eurobond lending will be a net positive for Nigeria s foreign reserves and by extension for the exchange rate However a recent comment by Finance Minister Zainab Ahmed that Nigeria will not enter the Eurobond market due to rising yields suggests that we will not see Eurobond lending next year But he mentioned that the country will target concessional loans from entities such as the World Bank which still adds to Nigeria s foreign reserve holdings Nigeria plans to raise 1 7 trillion naira in foreign loans in 2023 and will use it to partially finance its budget deficit Using the official exchange rate this is around 3 8 billion Exports and Oil Price Nigeria reportedly produced about 1 5 million barrels a day last month a big boost to the country s foreign exchange earnings The finance minister also stated that she anticipates an increase in oil production of 1 6 million barrels per day by the first quarter of 2023 Crude oil prices are also expected to exceed 100 next year according to various reports of global analysts tracked by Nairametrics The combination of oil prices and rising crude oil production is a major boost to Nigeria s foreign reserves and by extension the exchange rate Reversal of CBN Policy The Nigerian central bank has had its own fair share of exchange rate depreciation He inadvertently does so through various policy pronouncements that elicit bearish reactions from currency traders and even speculators The recent depreciation in November was largely due to the policy on new naira banknote designs But since then Nigerians appear to have warmed to the announcement forcing speculators to rethink We expect the move to cashless banking to be a net positive for the exchange rate as it stems the avalanche of speculation and currency hoarding A move towards more market friendly exchange rate determination and rate unification could also bode well for exchange rates in 2023 Potential Emerging Market Deal Nigeria and Ghana are not the only countries facing currency challenges in the world The US dollar has burned global currencies due to the US Federal Reserve s stance on raising rates As stated this could change next year when rate hikes cool off In addition Nairametrics strongly believes that there could be a big global deal for emerging markets and sub Saharan African countries next year Our thesis is based on the need to stimulate global consumption especially of goods manufactured in a more developed world If emerging markets like Nigeria cannot afford their imports it could hit growth in developed economies Based on this we will not be surprised if the G7 works on an agreement that could include lines of financing in dollars for an emerging market like Nigeria Russia vs Ukraine war We are in the 11th month of this war and things do not seem to end anytime soon However we do not expect this war to continue well into 2023 A potential Western Russian deal is likely next year which will be positive for emerging markets like Nigeria The war has contributed to the increase in inflation worldwide raising the prices of raw materials and logistics costs The contribution of the war to inflation also led to an increase in imported inflation from Nigeria which is around 14 If the war ends this will cool global inflation and by extension the Nigerian inflation rate A drop in the inflation rate helps boost exchange rate stability in the medium to long term not just in Nigeria but globally In one word The current exchange rate does not fully reflect the value of the naira in the short to medium term There are external and internal factors that could positively influence or even worsen it Monitoring these factors is essential to gauge the stability of Nigeria s exchange rate Related Credit https nairametrics com 2022 12 16 factors that could make the exchange rate stable in 2023
    Factors that could make the exchange rate stable in 2023
      The recent strengthening of the Ghanaian exchange rate provides some useful insight into what could happen to the Nigerian exchange rate if the stars align Ghana has seen its exchange rate rally by more than 25 since announcing a landmark 3 billion bailout deal with the IMF earlier in the week Cedis gained 15 on Thursday trading around 9 1 last check The currency s performance in the past week is seen to have been boosted by the IMF deal news meaning the country gets much needed liquidity to meet its foreign currency demands Ghana reported that its inflation rate exceeded 50 in November triggering another potential short term interest rate hike However we believe that the 3 billion IMF deal will help reduce the rate of inflation that most Ghanaians believe has been driven by exchange rate depreciation Nigeria is experiencing the same economic challenges as Ghana with an inflation rate of 21 47 the highest in over two decades Like Ghaha the rate of inflation is influenced by massive currency depreciations experienced on the black market Nigeria s exchange rate between its naira and the dollar depreciated to N850 1 in early Novemberand at some point analysts feared that it could fall to as low as N1000 1 At the end of the year The news continues after this announcement Since then the exchange rate appears to have settled on an anchor price of around N750 1 which suggests that the volatility experienced in the last three months has reduced Ghana s exchange rate experience influenced by the IMF deal news heralds an important lesson for currency speculators in Nigeria The exchange rate between the naira and the dollar can strengthen in a matter of days just because of a policy change or Nigeria strikes a major deal for a soft loan Nairametrics also believes there are a number of actions that could lead to a stronger naira in the short to medium term just as the cedis has strengthened Interest rate cooling A possible cooling off of an interest rate hike by the US Fed early next year is also a likely boost for Ghana and other emerging markets such as Nigeria The news continues after this announcement The US Federal Reserve voted earlier in the week to raise its interest rates by half a percentage point But the recent drop in the country s inflation rate suggests the Fed may start to wind down some of its interest rate hikes If this happens Nigeria is likely to benefit from this as most of the portfolio outflows experienced in the last two years could be reversed eurobonds The increase in Nigerian Eurobond lending will be a net positive for Nigeria s foreign reserves and by extension for the exchange rate However a recent comment by Finance Minister Zainab Ahmed that Nigeria will not enter the Eurobond market due to rising yields suggests that we will not see Eurobond lending next year But he mentioned that the country will target concessional loans from entities such as the World Bank which still adds to Nigeria s foreign reserve holdings Nigeria plans to raise 1 7 trillion naira in foreign loans in 2023 and will use it to partially finance its budget deficit Using the official exchange rate this is around 3 8 billion Exports and Oil Price Nigeria reportedly produced about 1 5 million barrels a day last month a big boost to the country s foreign exchange earnings The finance minister also stated that she anticipates an increase in oil production of 1 6 million barrels per day by the first quarter of 2023 Crude oil prices are also expected to exceed 100 next year according to various reports of global analysts tracked by Nairametrics The combination of oil prices and rising crude oil production is a major boost to Nigeria s foreign reserves and by extension the exchange rate Reversal of CBN Policy The Nigerian central bank has had its own fair share of exchange rate depreciation He inadvertently does so through various policy pronouncements that elicit bearish reactions from currency traders and even speculators The recent depreciation in November was largely due to the policy on new naira banknote designs But since then Nigerians appear to have warmed to the announcement forcing speculators to rethink We expect the move to cashless banking to be a net positive for the exchange rate as it stems the avalanche of speculation and currency hoarding A move towards more market friendly exchange rate determination and rate unification could also bode well for exchange rates in 2023 Potential Emerging Market Deal Nigeria and Ghana are not the only countries facing currency challenges in the world The US dollar has burned global currencies due to the US Federal Reserve s stance on raising rates As stated this could change next year when rate hikes cool off In addition Nairametrics strongly believes that there could be a big global deal for emerging markets and sub Saharan African countries next year Our thesis is based on the need to stimulate global consumption especially of goods manufactured in a more developed world If emerging markets like Nigeria cannot afford their imports it could hit growth in developed economies Based on this we will not be surprised if the G7 works on an agreement that could include lines of financing in dollars for an emerging market like Nigeria Russia vs Ukraine war We are in the 11th month of this war and things do not seem to end anytime soon However we do not expect this war to continue well into 2023 A potential Western Russian deal is likely next year which will be positive for emerging markets like Nigeria The war has contributed to the increase in inflation worldwide raising the prices of raw materials and logistics costs The contribution of the war to inflation also led to an increase in imported inflation from Nigeria which is around 14 If the war ends this will cool global inflation and by extension the Nigerian inflation rate A drop in the inflation rate helps boost exchange rate stability in the medium to long term not just in Nigeria but globally In one word The current exchange rate does not fully reflect the value of the naira in the short to medium term There are external and internal factors that could positively influence or even worsen it Monitoring these factors is essential to gauge the stability of Nigeria s exchange rate Related Credit https nairametrics com 2022 12 16 factors that could make the exchange rate stable in 2023
    Factors that could make the exchange rate stable in 2023
    General news2 months ago

    Factors that could make the exchange rate stable in 2023

    The recent strengthening of the Ghanaian exchange rate provides some useful insight into what could happen to the Nigerian exchange rate if the stars align.

    Ghana has seen its exchange rate rally by more than 25% since announcing a landmark $3 billion bailout deal with the IMF earlier in the week.

    Cedis gained 15% on Thursday trading around 9/$1 last check. The currency's performance in the past week is seen to have been boosted by the IMF deal news, meaning the country gets much-needed liquidity to meet its foreign currency demands.

    Ghana reported that its inflation rate exceeded 50% in November, triggering another potential short-term interest rate hike. However, we believe that the $3 billion IMF deal will help reduce the rate of inflation that most Ghanaians believe has been driven by exchange rate depreciation.

    Nigeria is experiencing the same economic challenges as Ghana with an inflation rate of 21.47%, the highest in over two decades. Like Ghaha, the rate of inflation is influenced by massive currency depreciations experienced on the black market.

    Nigeria's exchange rate between its naira and the dollar depreciated to N850/$1 in early Novemberand at some point, analysts feared that it could fall to as low as N1000/$1 At the end of the year.

    The news continues after this announcement.

    Since then, the exchange rate appears to have settled on an anchor price of around N750/$1 which suggests that the volatility experienced in the last three months has reduced.

    Ghana's exchange rate experience influenced by the IMF deal news heralds an important lesson for currency speculators in Nigeria.

    The exchange rate between the naira and the dollar can strengthen in a matter of days just because of a policy change or Nigeria strikes a major deal for a soft loan.

    Nairametrics also believes there are a number of actions that could lead to a stronger naira in the short to medium term, just as the cedis has strengthened.

    Interest rate cooling: A possible cooling off of an interest rate hike by the US Fed early next year is also a likely boost for Ghana and other emerging markets such as Nigeria.

    The news continues after this announcement.

    The US Federal Reserve voted earlier in the week to raise its interest rates by half a percentage point. But the recent drop in the country's inflation rate suggests the Fed may start to wind down some of its interest rate hikes. If this happens, Nigeria is likely to benefit from this as most of the portfolio outflows experienced in the last two years could be reversed.

    eurobonds: The increase in Nigerian Eurobond lending will be a net positive for Nigeria's foreign reserves and, by extension, for the exchange rate.

    However, a recent comment by Finance Minister Zainab Ahmed that Nigeria will not enter the Eurobond market due to rising yields suggests that we will not see Eurobond lending next year. But he mentioned that the country will target concessional loans from entities such as the World Bank, which still adds to Nigeria's foreign reserve holdings. Nigeria plans to raise 1.7 trillion naira in foreign loans in 2023 and will use it to partially finance its budget deficit. Using the official exchange rate, this is around $3.8 billion.

    Exports and Oil Price: Nigeria reportedly produced about 1.5 million barrels a day last month, a big boost to the country's foreign exchange earnings.

    The finance minister also stated that she anticipates an increase in oil production of 1.6 million barrels per day by the first quarter of 2023. Crude oil prices are also expected to exceed $100 next year according to various reports. of global analysts tracked by Nairametrics. The combination of oil prices and rising crude oil production is a major boost to Nigeria's foreign reserves and, by extension, the exchange rate.

    Reversal of CBN Policy: The Nigerian central bank has had its own fair share of exchange rate depreciation.

    He inadvertently does so through various policy pronouncements that elicit bearish reactions from currency traders and even speculators. The recent depreciation in November was largely due to the policy on new naira banknote designs. But since then, Nigerians appear to have warmed to the announcement, forcing speculators to rethink. We expect the move to cashless banking to be a net positive for the exchange rate, as it stems the avalanche of speculation and currency hoarding. A move towards more market-friendly exchange rate determination and rate unification could also bode well for exchange rates in 2023.

    Potential Emerging Market Deal: Nigeria and Ghana are not the only countries facing currency challenges in the world.

    The US dollar has burned global currencies due to the US Federal Reserve's stance on raising rates. As stated, this could change next year when rate hikes cool off. In addition, Nairametrics strongly believes that there could be a big global deal for emerging markets and sub-Saharan African countries next year. Our thesis is based on the need to stimulate global consumption, especially of goods manufactured in a more developed world. If emerging markets like Nigeria cannot afford their imports, it could hit growth in developed economies. Based on this, we will not be surprised if the G7 works on an agreement that could include lines of financing in dollars for an emerging market like Nigeria.

    Russia vs Ukraine war: We are in the 11th month of this war and things do not seem to end anytime soon. However, we do not expect this war to continue well into 2023.

    A potential Western-Russian deal is likely next year, which will be positive for emerging markets like Nigeria. The war has contributed to the increase in inflation worldwide, raising the prices of raw materials and logistics costs. The contribution of the war to inflation also led to an increase in imported inflation from Nigeria, which is around 14%. If the war ends, this will cool global inflation and by extension the Nigerian inflation rate. A drop in the inflation rate helps boost exchange rate stability in the medium to long term, not just in Nigeria but globally.

    In one word: The current exchange rate does not fully reflect the value of the naira in the short to medium term. There are external and internal factors that could positively influence or even worsen it. Monitoring these factors is essential to gauge the stability of Nigeria's exchange rate.

    Related

    Credit: https://nairametrics.com/2022/12/16/factors-that-could-make-the-exchange-rate-stable-in-2023/

  •   The strong recovery of the Seychellois economy has continued in 2022 led by a rebounding tourism sector Growth is uneven across other sectors of the economy The government has made significant progress in restoring macroeconomic balances and performance under the EFF program is strong Maintaining the buildup of buffers against shocks while protecting the most vulnerable people remains critical in the current global environment The executive Board of the International Monetary Fund IMF completed today the third review of Seychelles economic performance under the 32 month Extended Fund Facility EFF arrangement that was approved on July 29 2021 The completion of the review allows the authorities to draw the equivalent of SDR 6 5 million about 8 6 million bringing total disbursements under the current EFF to SDR 61 million about 80 6 million The Executive Board s decision was taken on a lapse of time basis 1 Seychelles economic recovery has remained very strong in 2022 fueled by a faster than expected rebound of the tourism sector At end September 2022 tourist arrivals were 125 percent higher than the same period in 2021 with stronger than expected demand from Europe and the Middle East The recovery is mostly concentrated in tourism related industries Real GDP growth is expected to reach 10 6 percent in 2022 before moderating to 5 4 percent in 2023 Inflation has been relatively low 3 0 percent year on year at end September 2022 reflecting the effects of currency appreciation in 2021 and earlier this year as well as the base effect of higher inflation in 2021 Average inflation is expected decline to 3 0 percent for 2022 before rising to 4 5 percent in 2023 reflecting higher import prices and a fading of the cushion provided by the lagged effect of the rupee appreciation The recovery has been accompanied by a significant fiscal consolidation and social support for the most vulnerable The primary fiscal deficit in 2022 is expected to narrow to 1 1 percent of GDP reflecting an extraordinary consolidation of 13 6 percentage points over the last two years Risks to debt sustainability have been significantly reduced with the public debt to GDP ratio expected to decline to about 68 percent at end 2022 a 21 percentage point reduction in two years In 2023 and over the medium term the primary balance will shift to a surplus as revenue measures will more than compensate for the planned increase in capital expenditure The government has provided social support for the population including through a program of targeted temporary cash transfers to protect the most vulnerable from rising food and fuel prices which is expected to run through early 2023 Program performance remains strong All end June 2022 quantitative performance criteria QPCs and indicative targets ITs as well as all end September 2022 ITs were met Good progress was made toward structural benchmarks although some were implemented with a delay due to capacity constraints The economic outlook while positive remains subject to risks including a worsening of economic prospects in many of Seychelles key tourist markets Russia the European Union and the United Kingdom high food and fuel prices and their effect on the most vulnerable a resurgence of COVID 19 higher than expected inflation and higher non performing loans from legacy forborne loans Climate related shocks remain as medium and long term risks The authorities near term priorities are to support the post pandemic recovery and maintain debt sustainability as well as address the impacts of rising food and fuel prices on the most vulnerable Over the medium term the authorities measures aim to increase revenues and bolster capital expenditure with a focus on climate change mitigation and adaptation In addition the structural reform agenda prioritizes revenue administration public financial management and governance including digitalization and state owned enterprise reform 1 The Executive Board takes decisions under its lapse of time procedure when a proposal can be considered without convening formal discussions
    International Monetary Fund (IMF) Executive Board Completes Third Review Under the Extended Fund Facility for Seychelles
      The strong recovery of the Seychellois economy has continued in 2022 led by a rebounding tourism sector Growth is uneven across other sectors of the economy The government has made significant progress in restoring macroeconomic balances and performance under the EFF program is strong Maintaining the buildup of buffers against shocks while protecting the most vulnerable people remains critical in the current global environment The executive Board of the International Monetary Fund IMF completed today the third review of Seychelles economic performance under the 32 month Extended Fund Facility EFF arrangement that was approved on July 29 2021 The completion of the review allows the authorities to draw the equivalent of SDR 6 5 million about 8 6 million bringing total disbursements under the current EFF to SDR 61 million about 80 6 million The Executive Board s decision was taken on a lapse of time basis 1 Seychelles economic recovery has remained very strong in 2022 fueled by a faster than expected rebound of the tourism sector At end September 2022 tourist arrivals were 125 percent higher than the same period in 2021 with stronger than expected demand from Europe and the Middle East The recovery is mostly concentrated in tourism related industries Real GDP growth is expected to reach 10 6 percent in 2022 before moderating to 5 4 percent in 2023 Inflation has been relatively low 3 0 percent year on year at end September 2022 reflecting the effects of currency appreciation in 2021 and earlier this year as well as the base effect of higher inflation in 2021 Average inflation is expected decline to 3 0 percent for 2022 before rising to 4 5 percent in 2023 reflecting higher import prices and a fading of the cushion provided by the lagged effect of the rupee appreciation The recovery has been accompanied by a significant fiscal consolidation and social support for the most vulnerable The primary fiscal deficit in 2022 is expected to narrow to 1 1 percent of GDP reflecting an extraordinary consolidation of 13 6 percentage points over the last two years Risks to debt sustainability have been significantly reduced with the public debt to GDP ratio expected to decline to about 68 percent at end 2022 a 21 percentage point reduction in two years In 2023 and over the medium term the primary balance will shift to a surplus as revenue measures will more than compensate for the planned increase in capital expenditure The government has provided social support for the population including through a program of targeted temporary cash transfers to protect the most vulnerable from rising food and fuel prices which is expected to run through early 2023 Program performance remains strong All end June 2022 quantitative performance criteria QPCs and indicative targets ITs as well as all end September 2022 ITs were met Good progress was made toward structural benchmarks although some were implemented with a delay due to capacity constraints The economic outlook while positive remains subject to risks including a worsening of economic prospects in many of Seychelles key tourist markets Russia the European Union and the United Kingdom high food and fuel prices and their effect on the most vulnerable a resurgence of COVID 19 higher than expected inflation and higher non performing loans from legacy forborne loans Climate related shocks remain as medium and long term risks The authorities near term priorities are to support the post pandemic recovery and maintain debt sustainability as well as address the impacts of rising food and fuel prices on the most vulnerable Over the medium term the authorities measures aim to increase revenues and bolster capital expenditure with a focus on climate change mitigation and adaptation In addition the structural reform agenda prioritizes revenue administration public financial management and governance including digitalization and state owned enterprise reform 1 The Executive Board takes decisions under its lapse of time procedure when a proposal can be considered without convening formal discussions
    International Monetary Fund (IMF) Executive Board Completes Third Review Under the Extended Fund Facility for Seychelles
    Africa2 months ago

    International Monetary Fund (IMF) Executive Board Completes Third Review Under the Extended Fund Facility for Seychelles

    The strong recovery of the Seychellois economy has continued in 2022, led by a rebounding tourism sector.

    Growth is uneven across other sectors of the economy.

    The government has made significant progress in restoring macroeconomic balances and performance under the EFF program is strong.

    Maintaining the buildup of buffers against shocks, while protecting the most vulnerable people remains critical in the current global environment.

    The executive Board of the International Monetary Fund (IMF) completed today the third review of Seychelles’ economic performance under the 32-month Extended Fund Facility (EFF) arrangement that was approved on July 29, 2021.

    The completion of the review allows the authorities to draw the equivalent of SDR 6.5 million (about $8.6 million), bringing total disbursements under the current EFF to SDR 61 million (about $80.6 million).

    The Executive Board’s decision was taken on a lapse-of-time basis [1].

    Seychelles’ economic recovery has remained very strong in 2022, fueled by a faster-than-expected rebound of the tourism sector.

    At end-September 2022, tourist arrivals were 125 percent higher than the same period in 2021, with stronger than expected demand from Europe and the Middle East. The recovery is mostly concentrated in tourism-related industries.

    Real GDP growth is expected to reach 10.6 percent in 2022, before moderating to 5.4 percent in 2023.

    Inflation has been relatively low (3.0 percent year-on-year at end-September 2022), reflecting the effects of currency appreciation in 2021 and earlier this year as well as the base effect of higher inflation in 2021.

    Average inflation is expected decline to 3.0 percent for 2022, before rising to 4.5 percent in 2023, reflecting higher import prices and a fading of the cushion provided by the lagged effect of the rupee appreciation.

    The recovery has been accompanied by a significant fiscal consolidation and social support for the most vulnerable.

    The primary fiscal deficit in 2022 is expected to narrow to 1.1 percent of GDP, reflecting an extraordinary consolidation of 13.6 percentage points over the last two years.

    Risks to debt sustainability have been significantly reduced with the public debt-to-GDP ratio expected to decline to about 68 percent at end-2022, a 21-percentage-point reduction in two years.

    In 2023 and over the medium term, the primary balance will shift to a surplus, as revenue measures will more than compensate for the planned increase in capital expenditure.

    The government has provided social support for the population, including through a program of targeted, temporary cash transfers to protect the most vulnerable from rising food and fuel prices, which is expected to run through early 2023.

    Program performance remains strong.

    All end-June 2022 quantitative performance criteria (QPCs) and indicative targets (ITs) as well as all end-September 2022 ITs were met.

    Good progress was made toward structural benchmarks, although some were implemented with a delay due to capacity constraints.

    The economic outlook, while positive, remains subject to risks, including a worsening of economic prospects in many of Seychelles’ key tourist markets (Russia, the European Union, and the United Kingdom), high food and fuel prices and their effect on the most vulnerable, a resurgence of COVID-19, higher-than-expected inflation, and higher non-performing loans from legacy forborne loans.

    Climate-related shocks remain as medium- and long-term risks.

    The authorities’ near-term priorities are to support the post-pandemic recovery and maintain debt sustainability as well as address the impacts of rising food and fuel prices on the most vulnerable.

    Over the medium-term, the authorities’ measures aim to increase revenues and bolster capital expenditure, with a focus on climate-change mitigation and adaptation.

    In addition, the structural reform agenda prioritizes revenue administration, public financial management, and governance, including digitalization, and state-owned enterprise reform.

    [1] The Executive Board takes decisions under its lapse-of-time procedure when a proposal can be considered without convening formal discussions.

  •   An International Monetary Fund IMF staff team led by St phane Roudet mission chief for Ghana will visit Accra from December 1 13 to continue discussions with the authorities on the country s post COVID program for economic growth and associated policies and reforms that could be supported by a new IMF lending arrangement IMF staff will also further engage with other stakeholders during the visit Mr Roudet issued the following statement ahead of the visit We have had productive discussions with the Ghanaian authorities over the last few months and look forward to our engagement in Accra Our objective for this visit is to make further progress toward reaching agreement on policies and reforms that could be supported by an IMF lending arrangement The IMF remains fully committed to help Ghana restore macroeconomic stability bring relief to Ghanaians in this time of crisis and lay the foundation for more inclusive growth
    International Monetary Fund (IMF) Staff to Visit Ghana
      An International Monetary Fund IMF staff team led by St phane Roudet mission chief for Ghana will visit Accra from December 1 13 to continue discussions with the authorities on the country s post COVID program for economic growth and associated policies and reforms that could be supported by a new IMF lending arrangement IMF staff will also further engage with other stakeholders during the visit Mr Roudet issued the following statement ahead of the visit We have had productive discussions with the Ghanaian authorities over the last few months and look forward to our engagement in Accra Our objective for this visit is to make further progress toward reaching agreement on policies and reforms that could be supported by an IMF lending arrangement The IMF remains fully committed to help Ghana restore macroeconomic stability bring relief to Ghanaians in this time of crisis and lay the foundation for more inclusive growth
    International Monetary Fund (IMF) Staff to Visit Ghana
    Africa2 months ago

    International Monetary Fund (IMF) Staff to Visit Ghana

    An International Monetary Fund (IMF) staff team, led by Stéphane Roudet, mission chief for Ghana, will visit Accra from December 1–13 to continue discussions with the authorities on the country’s post-COVID program for economic growth and associated policies and reforms that could be supported by a new IMF lending arrangement.

    IMF staff will also further engage with other stakeholders during the visit.

    Mr. Roudet issued the following statement ahead of the visit: “We have had productive discussions with the Ghanaian authorities over the last few months and look forward to our engagement in Accra.

    “Our objective for this visit is to make further progress toward reaching agreement on policies and reforms that could be supported by an IMF lending arrangement.

    “The IMF remains fully committed to help Ghana restore macroeconomic stability, bring relief to Ghanaians in this time of crisis, and lay the foundation for more inclusive growth.”

  •   In an apparent attempt to conserve eroding foreign exchange reserves Bangladeshi Prime Minister Sheikh Hasina has ordered the country s relevant authorities to squeeze imports of luxury items Sheikh Hasina however stressed the need to import more essential items He gave the directives at a secretaries level meeting held Sunday in the Bangladeshi capital Dhaka Bangladeshi Cabinet Secretary Khandker Anwarul Islam briefed reporters on the prime minister s directives after the high profile meeting Hasina asked the country s Ministry of Commerce to increase import tariffs on 40 luxury items to discourage importation of such products and improve the liquidity of the dollar in the foreign exchange market earlier this month Bangladesh s foreign exchange reserves reached 34 1 billion US dollars on November 23 up from 34 3 billion US dollars on November 17 according to the latest data from the Bangladesh Bank BB In this context it is reported that the central bank of Bangladesh is contemplating changing the exchange rate of the Bangladeshi taka currency against the US dollar That would mean a US dollar will be trading at 100 taka up from 98 taka at the end of the calendar year Facing the odds that pose a serious threat to macroeconomic stability the Bangladeshi government has already approached global lenders including the International Monetary Fund IMF for loans to build a buffer amid the downturn of foreign exchange reserves The IMF has confirmed that it has reached a staff level agreement with Bangladesh that will pave the way for the release of the long awaited 4 5 billion in credit support Hasina urged everyone in Bangladesh to work together to grow more food last month putting every inch of land under cultivation to protect the country from a potential global famine or food crisis As famine tensions rise in the country since Hasina s statement she said on Friday that Bangladesh has enough reserves to cover the import cost for five months and assured that there will be no consumer goods crisis in the country that apparently it is in a crisis situation Serious economic crisis triggered by the Russia Ukraine conflict and reckless rate hikes by the US causing a global economic earthquake Growing US debt is spreading to many countries around the world and countries like Bangladesh have felt the effects of the US Federal Reserve s aggressive interest rate hikes a leading Bangladeshi economist has warned With the US national debt already over 31 trillion and due to US rate hikes the world economy has contracted amid serious problems including currency devaluation inflation and the food crisis said Md Aynul Islam general secretary of the Bangladesh Economic Association BEA earlier this month Xinhua
    Bangladesh restricts imports of luxury items amid economic crisis
      In an apparent attempt to conserve eroding foreign exchange reserves Bangladeshi Prime Minister Sheikh Hasina has ordered the country s relevant authorities to squeeze imports of luxury items Sheikh Hasina however stressed the need to import more essential items He gave the directives at a secretaries level meeting held Sunday in the Bangladeshi capital Dhaka Bangladeshi Cabinet Secretary Khandker Anwarul Islam briefed reporters on the prime minister s directives after the high profile meeting Hasina asked the country s Ministry of Commerce to increase import tariffs on 40 luxury items to discourage importation of such products and improve the liquidity of the dollar in the foreign exchange market earlier this month Bangladesh s foreign exchange reserves reached 34 1 billion US dollars on November 23 up from 34 3 billion US dollars on November 17 according to the latest data from the Bangladesh Bank BB In this context it is reported that the central bank of Bangladesh is contemplating changing the exchange rate of the Bangladeshi taka currency against the US dollar That would mean a US dollar will be trading at 100 taka up from 98 taka at the end of the calendar year Facing the odds that pose a serious threat to macroeconomic stability the Bangladeshi government has already approached global lenders including the International Monetary Fund IMF for loans to build a buffer amid the downturn of foreign exchange reserves The IMF has confirmed that it has reached a staff level agreement with Bangladesh that will pave the way for the release of the long awaited 4 5 billion in credit support Hasina urged everyone in Bangladesh to work together to grow more food last month putting every inch of land under cultivation to protect the country from a potential global famine or food crisis As famine tensions rise in the country since Hasina s statement she said on Friday that Bangladesh has enough reserves to cover the import cost for five months and assured that there will be no consumer goods crisis in the country that apparently it is in a crisis situation Serious economic crisis triggered by the Russia Ukraine conflict and reckless rate hikes by the US causing a global economic earthquake Growing US debt is spreading to many countries around the world and countries like Bangladesh have felt the effects of the US Federal Reserve s aggressive interest rate hikes a leading Bangladeshi economist has warned With the US national debt already over 31 trillion and due to US rate hikes the world economy has contracted amid serious problems including currency devaluation inflation and the food crisis said Md Aynul Islam general secretary of the Bangladesh Economic Association BEA earlier this month Xinhua
    Bangladesh restricts imports of luxury items amid economic crisis
    Foreign2 months ago

    Bangladesh restricts imports of luxury items amid economic crisis

    - In an apparent attempt to conserve eroding foreign exchange reserves, Bangladeshi Prime Minister Sheikh Hasina has ordered the country's relevant authorities to squeeze imports of luxury items.

    Sheikh Hasina, however, stressed the need to import more essential items. He gave the directives at a secretaries-level meeting held Sunday in the Bangladeshi capital Dhaka.

    Bangladeshi Cabinet Secretary Khandker Anwarul Islam briefed reporters on the prime minister's directives after the high-profile meeting.

    Hasina asked the country's Ministry of Commerce to increase import tariffs on 40 luxury items to discourage importation of such products and improve the liquidity of the dollar in the foreign exchange market earlier this month.

    Bangladesh's foreign exchange reserves reached 34.1 billion US dollars on November 23, up from 34.3 billion US dollars on November 17, according to the latest data from the Bangladesh Bank (BB).

    In this context, it is reported that the central bank of Bangladesh is contemplating changing the exchange rate of the Bangladeshi taka currency against the US dollar. That would mean a US dollar will be trading at 100 taka, up from 98 taka at the end of the calendar year.

    Facing the odds that pose a serious threat to macroeconomic stability, the Bangladeshi government has already approached global lenders, including the International Monetary Fund (IMF), for loans to build a buffer amid the downturn. of foreign exchange reserves.

    The IMF has confirmed that it has reached a staff-level agreement with Bangladesh that will pave the way for the release of the long-awaited $4.5 billion in credit support.

    Hasina urged everyone in Bangladesh to work together to grow more food last month, putting every inch of land under cultivation to protect the country from a potential global famine or food crisis.

    As famine tensions rise in the country since Hasina's statement, she said on Friday that Bangladesh has enough reserves to cover the import cost for five months and assured that there will be no consumer goods crisis in the country that apparently it is in a crisis situation. Serious economic crisis triggered by the Russia-Ukraine conflict and reckless rate hikes by the US causing a global economic earthquake.

    Growing US debt is spreading to many countries around the world and countries like Bangladesh have felt the effects of the US Federal Reserve's aggressive interest rate hikes, a leading Bangladeshi economist has warned.

    With the US national debt already over $31 trillion and due to US rate hikes, the world economy has contracted amid serious problems including currency devaluation, inflation and the food crisis, said Md Aynul Islam, general secretary of the Bangladesh Economic Association (BEA). earlier this month. ■



    (Xinhua)

  •   Experts called on the Lebanese authorities on Friday to advance a recovery plan that would preserve the rights of depositors in Lebanese commercial banks to restore confidence in the ailing banking sector The government has issued debt instruments to borrow money from depositors through central and commercial banks Therefore as the representative of the state the government must hold productive discussions with creditors to reach a fair and constitutional said the former deputy governor of the Central Bank Mohammed Baassiri was speaking on the sidelines of the 2022 Beirut Economic Forum which opened in the capital city on Thursday The forum organized by the Union of Arab Banks UAB in Beirut focuses on sharing local experiences in economic reforms in part helping Lebanon secure financial support from the International Monetary Fund IMF and discussing ways to find a recovery adequate plan to the economic crisis in Lebanon The plan stated that small depositors would be protected to the greatest extent possible at every viable bank prompting depositors and their advocacy groups to question clarity and feasibility In addition the plan would cancel a large part of the central bank s foreign currency obligations to commercial banks with non viable banks due to be dissolved in November Lebanon s 14 largest commercial banks which account for 83 percent of the country s total assets will be audited and viable banks will be recapitalized with significant contributions from bank shareholders and large depositors Although it was already launched by the government earlier this year the plan has yet to be implemented due to the political deadlock in the country Samir Hammoud a banking consultant and former chairman of the Lebanese Banking Control Commission said it is a priority to protect all depositors including those who have spent their lives abroad to save money in their homeland He said depositors should be able to receive their money in the same deposit currency Hammoud suggested using some of the banks assets to recreate the banking sector with new capital governance and liquidity in line with the standards of BASEL a global standard setter for the prudential regulation of banks which would restore IMF confidence rating agencies and audit firms Hammoud also stressed the need for Lebanon to boost its partnership with Arab countries to restore confidence in their banks Baassiri stressed the need to elect a new president and form a functional cabinet committed to immediate reforms to restore confidence in the banking sector an uncomfortable but necessary task Osama Ahmed Ben Saleh Bukhari head of the Banking Commission of the International Chamber of Commerce said depositors are not responsible for the failed policies adopted by successive governments He proposed using digital currency to partly offset lost deposits instead of printing money Part of the deposits can be returned electronically which would reduce the burden on the system he said Lebanon s unprecedented financial crisis forced banks to restrict the withdrawal of deposits placing a heavy burden on people by depriving them of their savings Xinhua
    Roundup: Experts call for protecting Lebanese depositors amid unprecedented financial crisis
      Experts called on the Lebanese authorities on Friday to advance a recovery plan that would preserve the rights of depositors in Lebanese commercial banks to restore confidence in the ailing banking sector The government has issued debt instruments to borrow money from depositors through central and commercial banks Therefore as the representative of the state the government must hold productive discussions with creditors to reach a fair and constitutional said the former deputy governor of the Central Bank Mohammed Baassiri was speaking on the sidelines of the 2022 Beirut Economic Forum which opened in the capital city on Thursday The forum organized by the Union of Arab Banks UAB in Beirut focuses on sharing local experiences in economic reforms in part helping Lebanon secure financial support from the International Monetary Fund IMF and discussing ways to find a recovery adequate plan to the economic crisis in Lebanon The plan stated that small depositors would be protected to the greatest extent possible at every viable bank prompting depositors and their advocacy groups to question clarity and feasibility In addition the plan would cancel a large part of the central bank s foreign currency obligations to commercial banks with non viable banks due to be dissolved in November Lebanon s 14 largest commercial banks which account for 83 percent of the country s total assets will be audited and viable banks will be recapitalized with significant contributions from bank shareholders and large depositors Although it was already launched by the government earlier this year the plan has yet to be implemented due to the political deadlock in the country Samir Hammoud a banking consultant and former chairman of the Lebanese Banking Control Commission said it is a priority to protect all depositors including those who have spent their lives abroad to save money in their homeland He said depositors should be able to receive their money in the same deposit currency Hammoud suggested using some of the banks assets to recreate the banking sector with new capital governance and liquidity in line with the standards of BASEL a global standard setter for the prudential regulation of banks which would restore IMF confidence rating agencies and audit firms Hammoud also stressed the need for Lebanon to boost its partnership with Arab countries to restore confidence in their banks Baassiri stressed the need to elect a new president and form a functional cabinet committed to immediate reforms to restore confidence in the banking sector an uncomfortable but necessary task Osama Ahmed Ben Saleh Bukhari head of the Banking Commission of the International Chamber of Commerce said depositors are not responsible for the failed policies adopted by successive governments He proposed using digital currency to partly offset lost deposits instead of printing money Part of the deposits can be returned electronically which would reduce the burden on the system he said Lebanon s unprecedented financial crisis forced banks to restrict the withdrawal of deposits placing a heavy burden on people by depriving them of their savings Xinhua
    Roundup: Experts call for protecting Lebanese depositors amid unprecedented financial crisis
    Foreign2 months ago

    Roundup: Experts call for protecting Lebanese depositors amid unprecedented financial crisis

    - Experts called on the Lebanese authorities on Friday to advance a recovery plan that would preserve the rights of depositors in Lebanese commercial banks to restore confidence in the ailing banking sector.

    "The government has issued debt instruments to borrow money from depositors through central and commercial banks. Therefore, as the representative of the state, the government must hold productive discussions with creditors to reach a fair and constitutional," said the former deputy governor of the Central Bank, Mohammed. Baassiri was speaking on the sidelines of the 2022 Beirut Economic Forum which opened in the capital city on Thursday.

    The forum, organized by the Union of Arab Banks (UAB) in Beirut, focuses on sharing local experiences in economic reforms, in part helping Lebanon secure financial support from the International Monetary Fund (IMF) and discussing ways to find a recovery. adequate. plan to the economic crisis in Lebanon.

    The plan stated that small depositors would be protected "to the greatest extent possible" at every viable bank, prompting depositors and their advocacy groups to question clarity and feasibility.

    In addition, the plan would cancel "a large part" of the central bank's foreign currency obligations to commercial banks, with non-viable banks due to be dissolved in November.

    Lebanon's 14 largest commercial banks, which account for 83 percent of the country's total assets, will be audited, and viable banks will be recapitalized with "significant contributions" from bank shareholders and large depositors.

    Although it was already launched by the government earlier this year, the plan has yet to be implemented due to the political deadlock in the country.

    Samir Hammoud, a banking consultant and former chairman of the Lebanese Banking Control Commission, said it is a priority to protect all depositors, including those who have spent their lives abroad to save money in their homeland.

    He said depositors should be able to receive their money in the same deposit currency.

    Hammoud suggested using some of the banks' assets to recreate the banking sector with new capital, governance and liquidity in line with the standards of BASEL, a global standard-setter for the prudential regulation of banks, which would restore IMF confidence, rating agencies, and audit firms.

    Hammoud also stressed the need for Lebanon to boost its partnership with Arab countries to restore confidence in their banks.

    Baassiri stressed the need to elect a new president and form a functional cabinet committed to immediate reforms to restore confidence in the banking sector, an uncomfortable but necessary task.

    Osama Ahmed Ben Saleh Bukhari, head of the Banking Commission of the International Chamber of Commerce, said depositors are not responsible for the failed policies adopted by successive governments.

    He proposed using digital currency to partly offset lost deposits instead of printing money.

    "Part of the deposits can be returned electronically, which would reduce the burden on the system," he said.

    Lebanon's unprecedented financial crisis forced banks to restrict the withdrawal of deposits, placing a heavy burden on people by depriving them of their savings. ■



    (Xinhua)

  •   Lebanon will not be able to get out of its financial crisis without efficient authorities that implement the structural reforms required by the International Monetary Fund IMF Lebanese Prime Minister Najib Mikati said on Thursday The crisis must be overcome through a general agreement that includes the election of a new president of the republic as soon as possible the formation of a new government the adoption of the required reforms and the conclusion of a final agreement with the IMF Mikati said in a statement issued by the Council of Ministers Mikati made the remarks at the Beirut Economic Forum 2022 which was hosted by the Union of Arab Banks UAB in Beirut Mikati said the deal with the IMF would help Lebanon attract foreign currency income through the fund or from donor countries The IMF and donor countries will not support Lebanon if they don t see serious reforms taking place The conclusion of an agreement with the IMF would also put the country on the path of economic growth thus reducing social and economic pressures on Lebanese families he said Lebanon has witnessed its worst financial crisis in its history amid a shortage of US currency reserves that led to the collapse of the Lebanese pound and a sharp rise in inflation Meanwhile the outbreak of COVID 19 and the explosions in the port of Beirut caused hundreds of thousands of citizens to lose their jobs with the unemployment rate hovering around 40 percent according to the Lebanese Ministry of Labor Xinhua
    Lebanon needs agreement with IMF to overcome crisis: prime minister
      Lebanon will not be able to get out of its financial crisis without efficient authorities that implement the structural reforms required by the International Monetary Fund IMF Lebanese Prime Minister Najib Mikati said on Thursday The crisis must be overcome through a general agreement that includes the election of a new president of the republic as soon as possible the formation of a new government the adoption of the required reforms and the conclusion of a final agreement with the IMF Mikati said in a statement issued by the Council of Ministers Mikati made the remarks at the Beirut Economic Forum 2022 which was hosted by the Union of Arab Banks UAB in Beirut Mikati said the deal with the IMF would help Lebanon attract foreign currency income through the fund or from donor countries The IMF and donor countries will not support Lebanon if they don t see serious reforms taking place The conclusion of an agreement with the IMF would also put the country on the path of economic growth thus reducing social and economic pressures on Lebanese families he said Lebanon has witnessed its worst financial crisis in its history amid a shortage of US currency reserves that led to the collapse of the Lebanese pound and a sharp rise in inflation Meanwhile the outbreak of COVID 19 and the explosions in the port of Beirut caused hundreds of thousands of citizens to lose their jobs with the unemployment rate hovering around 40 percent according to the Lebanese Ministry of Labor Xinhua
    Lebanon needs agreement with IMF to overcome crisis: prime minister
    Foreign2 months ago

    Lebanon needs agreement with IMF to overcome crisis: prime minister

    - Lebanon will not be able to get out of its financial crisis without efficient authorities that implement the structural reforms required by the International Monetary Fund (IMF), Lebanese Prime Minister Najib Mikati said on Thursday.

    "The crisis must be overcome through a general agreement that includes the election of a new president of the republic as soon as possible, the formation of a new government, the adoption of the required reforms and the conclusion of a final agreement with the IMF. Mikati said in a statement issued by the Council of Ministers.

    Mikati made the remarks at the Beirut Economic Forum 2022, which was hosted by the Union of Arab Banks (UAB) in Beirut.

    Mikati said the deal with the IMF would help Lebanon attract foreign currency income through the fund or from donor countries.

    “The IMF and donor countries will not support Lebanon if they don't see serious reforms taking place. The conclusion of an agreement with the IMF would also put the country on the path of economic growth, thus reducing social and economic pressures on Lebanese families. " he said.

    Lebanon has witnessed its worst financial crisis in its history amid a shortage of US currency reserves that led to the collapse of the Lebanese pound and a sharp rise in inflation.

    Meanwhile, the outbreak of COVID-19 and the explosions in the port of Beirut caused hundreds of thousands of citizens to lose their jobs, with the unemployment rate hovering around 40 percent, according to the Lebanese Ministry of Labor. ■



    (Xinhua)

  •   Guinea has reached a staff level agreement to receive up to 69 million 25 percent of Guinea s IMF quota in emergency financing through the IMF s new Food Shock Window under the Rapid Credit Facility This emergency financing will help Guinea address its urgent balance of payments needs related to the global food crisis Guinea s request will be discussed by the IMF s Executive Board as soon as possible Following Guinea s Article IV consultation IMF staff project growth to reach 4 7 percent in 2022 driven by continued strength in the mining sector even as the non mining sector grapples with the impact of the international price shock Containing the effects of the price shock and cushioning its impact on food security is the key short term policy priority An International Monetary Fund IMF staff team led by Ms Clara Mira held a hybrid mission from October 4 November 18 2022 to conduct the 2022 Article IV Consultation discussions with Guinea during which the authorities requested emergency financing under the IMF Rapid Credit Facility s new Food Shock Window At the end of the mission Ms Mira made the following statement The pandemic impacted Guinea s non mining sector harder than expected The war in Ukraine and the subsequent global food fuel and fertilizer price shock and ensuing food insecurity together with the period of political uncertainty worsened the situation further Nonetheless mining sector growth remained resilient driven by strong mining production enabling overall growth to reach an expected 4 4 percent in 2021 and 4 7 in 2022 Average inflation is expected to remain at 12 percent in 2022 broadly the same level as in 2021 due mostly to rising food and petrol prices A decline in central bank net credit to the government made possible in part by the SDR allocation and the appreciation of the Guinean Franc in the first half of 2022 prevented a further increase in inflation in 2022 Food insecurity has worsened since early 2022 with the number of people in acute food insecurity projected to reach over 11 percent by the end of the year As a result of the spike in international prices fertilizer prices increased by more than 300 percent A potentially below average harvest resulting from low use of fertilizers may lead to additional food insecurity in early 2023 and to higher food imports Revenue performance in 2021 and the first half of 2022 was somewhat weaker than expected despite the improvements observed in the first half of 2022 Non mining revenue has yet to return to its pre pandemic levels Furthermore food and fuel support measures led to significant foregone revenues for the latter of about 2 1 percent of GDP in 2022 Increased digitalization and improvements in tax collection as well as large one off payments to the government have thus far helped compensate some of the foregone revenues The authorities restraint in recurrent spending and the under execution in the capital budget compensated the overall weaker revenue performance and helped reduce the overall fiscal deficit in 2022 The surge in commodity prices in 2022 is expected to have a net negative impact on Guinea s overall balance of payments While ongoing growth in mining output and export volumes compensates somewhat for this the financing of the balance of payments appears more challenging In this context the IMF reached a staff level agreement with Guinea on financial assistance under the Rapid Credit Facility through the IMF s new Food Shock Window to help address Guinea s urgent balance of payments need and rising food insecurity The disbursement under the Food Shock Window of SDR 53 6 million about US 69 million or 25 percent of Guinea s IMF quota will contribute to mitigate the severe impact of the food crisis It will also provide resources to support the most vulnerable through food and cash distribution and finance interventions to improve the supply of fertilizers and support farmers The mission welcomed the authorities efforts to refrain from additional central bank financing It also encouraged the authorities to scale up the social protection system Down the road the scaling up should support efforts to remove fuel and electricity subsidies which are a drain on public resources and are highly regressive The IMF mission encouraged the authorities to continue their efforts to mobilize domestic revenue including from the mining sector and welcomed the bauxite transfer pricing reform to create fiscal space to finance the pressing human capital and infrastructure development needs Debt sustainability must be preserved by maintaining a prudent borrowing strategy and a cautious use of non concessional finance Additional reforms to boost diversification strengthen governance and improve the business climate will enable a more resilient and inclusive recovery in the challenging domestic and international context The team met with the Minister of Economy and Finance Moussa Ciss Minister of Budget Lancin Cond Central Bank Governor Karamo Kaba and other senior officials and representatives from the private sector civil society and the development partner community The IMF mission wishes to express its gratitude to the Guinean authorities for the constructive discussions during the hybrid visit IMF staff is now preparing to present to the IMF s Executive Board for approval a report of the Article IV consultation and the authorities request for emergency financing through the IMF s Food Shock Window as soon as possible
    International Monetary Fund (IMF) Staff Completes 2022 Article IV Mission to and Reaches Staff-Level Agreement with Guinea on Financial Assistance through the Food Shock Window under the Rapid Credit Facility
      Guinea has reached a staff level agreement to receive up to 69 million 25 percent of Guinea s IMF quota in emergency financing through the IMF s new Food Shock Window under the Rapid Credit Facility This emergency financing will help Guinea address its urgent balance of payments needs related to the global food crisis Guinea s request will be discussed by the IMF s Executive Board as soon as possible Following Guinea s Article IV consultation IMF staff project growth to reach 4 7 percent in 2022 driven by continued strength in the mining sector even as the non mining sector grapples with the impact of the international price shock Containing the effects of the price shock and cushioning its impact on food security is the key short term policy priority An International Monetary Fund IMF staff team led by Ms Clara Mira held a hybrid mission from October 4 November 18 2022 to conduct the 2022 Article IV Consultation discussions with Guinea during which the authorities requested emergency financing under the IMF Rapid Credit Facility s new Food Shock Window At the end of the mission Ms Mira made the following statement The pandemic impacted Guinea s non mining sector harder than expected The war in Ukraine and the subsequent global food fuel and fertilizer price shock and ensuing food insecurity together with the period of political uncertainty worsened the situation further Nonetheless mining sector growth remained resilient driven by strong mining production enabling overall growth to reach an expected 4 4 percent in 2021 and 4 7 in 2022 Average inflation is expected to remain at 12 percent in 2022 broadly the same level as in 2021 due mostly to rising food and petrol prices A decline in central bank net credit to the government made possible in part by the SDR allocation and the appreciation of the Guinean Franc in the first half of 2022 prevented a further increase in inflation in 2022 Food insecurity has worsened since early 2022 with the number of people in acute food insecurity projected to reach over 11 percent by the end of the year As a result of the spike in international prices fertilizer prices increased by more than 300 percent A potentially below average harvest resulting from low use of fertilizers may lead to additional food insecurity in early 2023 and to higher food imports Revenue performance in 2021 and the first half of 2022 was somewhat weaker than expected despite the improvements observed in the first half of 2022 Non mining revenue has yet to return to its pre pandemic levels Furthermore food and fuel support measures led to significant foregone revenues for the latter of about 2 1 percent of GDP in 2022 Increased digitalization and improvements in tax collection as well as large one off payments to the government have thus far helped compensate some of the foregone revenues The authorities restraint in recurrent spending and the under execution in the capital budget compensated the overall weaker revenue performance and helped reduce the overall fiscal deficit in 2022 The surge in commodity prices in 2022 is expected to have a net negative impact on Guinea s overall balance of payments While ongoing growth in mining output and export volumes compensates somewhat for this the financing of the balance of payments appears more challenging In this context the IMF reached a staff level agreement with Guinea on financial assistance under the Rapid Credit Facility through the IMF s new Food Shock Window to help address Guinea s urgent balance of payments need and rising food insecurity The disbursement under the Food Shock Window of SDR 53 6 million about US 69 million or 25 percent of Guinea s IMF quota will contribute to mitigate the severe impact of the food crisis It will also provide resources to support the most vulnerable through food and cash distribution and finance interventions to improve the supply of fertilizers and support farmers The mission welcomed the authorities efforts to refrain from additional central bank financing It also encouraged the authorities to scale up the social protection system Down the road the scaling up should support efforts to remove fuel and electricity subsidies which are a drain on public resources and are highly regressive The IMF mission encouraged the authorities to continue their efforts to mobilize domestic revenue including from the mining sector and welcomed the bauxite transfer pricing reform to create fiscal space to finance the pressing human capital and infrastructure development needs Debt sustainability must be preserved by maintaining a prudent borrowing strategy and a cautious use of non concessional finance Additional reforms to boost diversification strengthen governance and improve the business climate will enable a more resilient and inclusive recovery in the challenging domestic and international context The team met with the Minister of Economy and Finance Moussa Ciss Minister of Budget Lancin Cond Central Bank Governor Karamo Kaba and other senior officials and representatives from the private sector civil society and the development partner community The IMF mission wishes to express its gratitude to the Guinean authorities for the constructive discussions during the hybrid visit IMF staff is now preparing to present to the IMF s Executive Board for approval a report of the Article IV consultation and the authorities request for emergency financing through the IMF s Food Shock Window as soon as possible
    International Monetary Fund (IMF) Staff Completes 2022 Article IV Mission to and Reaches Staff-Level Agreement with Guinea on Financial Assistance through the Food Shock Window under the Rapid Credit Facility
    Africa2 months ago

    International Monetary Fund (IMF) Staff Completes 2022 Article IV Mission to and Reaches Staff-Level Agreement with Guinea on Financial Assistance through the Food Shock Window under the Rapid Credit Facility

    Guinea has reached a staff-level agreement to receive up to $69 million (25 percent of Guinea’s IMF quota) in emergency financing through the IMF’s new Food Shock Window under the Rapid Credit Facility; This emergency financing will help Guinea address its urgent balance of payments needs related to the global food crisis.

    Guinea’s request will be discussed by the IMF’s Executive Board as soon as possible; Following Guinea’s Article IV consultation, IMF staff project growth to reach 4.7 percent in 2022, driven by continued strength in the mining sector, even as the non-mining sector grapples with the impact of the international price shock; Containing the effects of the price shock and cushioning its impact on food security is the key short-term policy priority.

    An International Monetary Fund (IMF) staff team, led by Ms. Clara Mira, held a hybrid mission from October 4 – November 18, 2022, to conduct the 2022 Article IV Consultation discussions with Guinea, during which the authorities requested emergency financing under the IMF Rapid Credit Facility’s new Food Shock Window.

    At the end of the mission, Ms. Mira made the following statement: “The pandemic impacted Guinea’s non-mining sector harder than expected.

    The war in Ukraine and the subsequent global food, fuel and fertilizer price shock and ensuing food insecurity, together with the period of political uncertainty, worsened the situation further.

    Nonetheless, mining sector growth remained resilient, driven by strong mining production, enabling overall growth to reach an expected 4.4 percent in 2021 and 4.7 in 2022.

    “Average inflation is expected to remain at 12 percent in 2022, broadly the same level as in 2021, due mostly to rising food and petrol prices.

    A decline in central bank net credit to the government, made possible in part by the SDR allocation, and the appreciation of the Guinean Franc in the first half of 2022, prevented a further increase in inflation in 2022.

    “Food insecurity has worsened since early 2022, with the number of people in acute food insecurity projected to reach over 11 percent by the end of the year.

    As a result of the spike in international prices, fertilizer prices increased by more than 300 percent.

    A potentially below-average harvest resulting from low use of fertilizers may lead to additional food insecurity in early 2023 and to higher food imports.

    “Revenue performance in 2021 and the first half of 2022 was somewhat weaker than expected, despite the improvements observed in the first half of 2022.

    Non-mining revenue has yet to return to its pre-pandemic levels.

    Furthermore, food and fuel support measures led to significant foregone revenues—for the latter, of about 2.1 percent of GDP in 2022.

    Increased digitalization and improvements in tax collection, as well as large one-off payments to the government, have thus far helped compensate some of the foregone revenues.

    “The authorities’ restraint in recurrent spending and the under-execution in the capital budget compensated the overall weaker revenue performance and helped reduce the overall fiscal deficit in 2022.

    “The surge in commodity prices in 2022 is expected to have a net negative impact on Guinea’s overall balance of payments.

    While ongoing growth in mining output and export volumes compensates somewhat for this, the financing of the balance of payments appears more challenging.

    “In this context, the IMF reached a staff-level agreement with Guinea on financial assistance under the Rapid Credit Facility through the IMF’s new Food Shock Window to help address Guinea’s urgent balance-of-payments need and rising food insecurity.

    The disbursement under the Food Shock Window, of SDR 53.6 million (about US$69 million or 25 percent of Guinea’s IMF quota), will contribute to mitigate the severe impact of the food crisis.

    It will also provide resources to support the most vulnerable through food and cash distribution, and finance interventions to improve the supply of fertilizers and support farmers.

    “The mission welcomed the authorities’ efforts to refrain from additional central bank financing.

    It also encouraged the authorities to scale-up the social protection system.

    Down the road, the scaling up should support efforts to remove fuel and electricity subsidies, which are a drain on public resources and are highly regressive.

    “The IMF mission encouraged the authorities to continue their efforts to mobilize domestic revenue –including from the mining sector and welcomed the bauxite transfer pricing reform—to create fiscal space to finance the pressing human capital and infrastructure development needs.

    Debt sustainability must be preserved by maintaining a prudent borrowing strategy and a cautious use of non-concessional finance.

    “Additional reforms to boost diversification, strengthen governance, and improve the business climate will enable a more resilient and inclusive recovery in the challenging domestic and international context.” The team met with the Minister of Economy and Finance Moussa Cissé, Minister of Budget Lanciné Condé, Central Bank Governor Karamo Kaba, and other senior officials, and representatives from the private sector, civil society, and the development partner community.

    The IMF mission wishes to express its gratitude to the Guinean authorities for the constructive discussions during the hybrid visit.

    IMF staff is now preparing to present to the IMF’s Executive Board for approval a report of the Article IV consultation and the authorities’ request for emergency financing through the IMF’s Food Shock Window as soon as possible.

  •   IMF staff and the South Sudanese authorities have reached a staff level agreement for about US 112 7 million in emergency financing through the IMF s new Food Shock Window of the Rapid Credit Facility combined with a Program Monitoring with Board Involvement This emergency financing under the new Food Shock Window will help South Sudan address food insecurity support social spending and boost international reserves The Program Monitoring with Board Involvement will support economic policies aimed at maintaining macroeconomic stability and debt sustainability South Sudan s request for emergency support is subject to approval by IMF management and the Executive Board in the coming weeks Ahead of the Executive Board consideration of this request the authorities will implement several reforms to strengthen governance and transparency An International Monetary Fund IMF staff team led by Mr Niko Hobdari visited South Sudan from November 7 to November 17 2022 The team held discussions with the authorities on an existing Staff Monitored Program SMP and on the authorities request for access to emergency financing through the new Food Shock Window of the Rapid Credit Facility RCF to address urgent balance of payments needs The IMF team also discussed South Sudan s request for a 9 month Program Monitoring with Board Involvement PMB At the end of the visit Mr Hobdari issued the following statement The IMF staff team and the South Sudanese authorities have reached staff level agreement for completing the third and final review of the SMP and on economic policies for a disbursement under the IMF s new Food Shock Window of the RCF that would be combined with a 9 month PMB The disbursement is subject to approval by the IMF s Executive Board which will discuss it in the coming weeks Upon approval by the Executive Board South Sudan would have access to about US 112 7 million SDR 86 1 million These resources will be used predominantly to help address food insecurity support social spending and boost international reserves This disbursement will bring total outstanding Fund credit under emergency financing instruments to South Sudan to SDR 246 0 million or 100 percent of its quota at the IMF Ahead of the Executive Board consideration of the Food Shock Window request the authorities will implement several reforms to strengthen governance and transparency These include publishing budget execution reports publishing the results of a stock take of South Sudan s external debt publishing the Auditor General s report on the second RCF disbursement and starting to address its findings and recommendations as well as strengthening the process for contracting external debt and issuing sovereign guarantees The combination of continued localized conflict four consecutive years of severe flooding and the rising price of staple commodities from Russia s war in Ukraine has increased the number of people experiencing severe food insecurity to an estimated 8 3 million in 2022 over two thirds of the population For this reason the authorities have committed to collaborate with trusted development partners to channel US 20 million of the RCF disbursement to make use of their existing systems to provide immediate humanitarian assistance to help address food insecurity Significant reforms have been introduced since the start of the Staff Monitored Program in March 2021 such for example the unification of the official and parallel exchange rates Fiscal pressures however led to the temporary resumption of overdrafts from the central bank and a return to the use of oil advances to finance the budget during the final quarter of FY2021 22 The rise in the money supply due to monetary financing triggered a significant depreciation of the exchange rate which has compounded external price pressures in an economy that is heavily reliant on imported goods The IMF mission is encouraged by the actions taken by the Ministry of Finance and Planning and the Bank of South Sudan since August 2022 to restore fiscal discipline and rein in money growth which has stabilized the exchange rate in recent months Going forward it will be critical for the authorities to continue prudent fiscal and monetary policies and to consolidate and build on the first steps taken under the SMP to improve public financial management The IMF mission met with the Minister of Finance and Planning Mr Dier Tong Ngor Minister of Petroleum Mr Puot Kang Chol Governor of the Bank of South Sudan Mr Johnny Ohisa Damian Commissioner General of the National Revenue Authority Mr Patrick Mugoya Auditor General Mr Steven Wondu and other high level government officials and representatives of the diplomatic community private sector and civil society The IMF team thanks the authorities for their hospitality and the productive discussions
    International Monetary Fund (IMF) Reaches Staff-Level Agreement with the Republic of South Sudan on the Third Review of the Staff-Monitored Program, a Rapid Credit Facility through the Food Shock Window and Program Monitoring with Board Involvement
      IMF staff and the South Sudanese authorities have reached a staff level agreement for about US 112 7 million in emergency financing through the IMF s new Food Shock Window of the Rapid Credit Facility combined with a Program Monitoring with Board Involvement This emergency financing under the new Food Shock Window will help South Sudan address food insecurity support social spending and boost international reserves The Program Monitoring with Board Involvement will support economic policies aimed at maintaining macroeconomic stability and debt sustainability South Sudan s request for emergency support is subject to approval by IMF management and the Executive Board in the coming weeks Ahead of the Executive Board consideration of this request the authorities will implement several reforms to strengthen governance and transparency An International Monetary Fund IMF staff team led by Mr Niko Hobdari visited South Sudan from November 7 to November 17 2022 The team held discussions with the authorities on an existing Staff Monitored Program SMP and on the authorities request for access to emergency financing through the new Food Shock Window of the Rapid Credit Facility RCF to address urgent balance of payments needs The IMF team also discussed South Sudan s request for a 9 month Program Monitoring with Board Involvement PMB At the end of the visit Mr Hobdari issued the following statement The IMF staff team and the South Sudanese authorities have reached staff level agreement for completing the third and final review of the SMP and on economic policies for a disbursement under the IMF s new Food Shock Window of the RCF that would be combined with a 9 month PMB The disbursement is subject to approval by the IMF s Executive Board which will discuss it in the coming weeks Upon approval by the Executive Board South Sudan would have access to about US 112 7 million SDR 86 1 million These resources will be used predominantly to help address food insecurity support social spending and boost international reserves This disbursement will bring total outstanding Fund credit under emergency financing instruments to South Sudan to SDR 246 0 million or 100 percent of its quota at the IMF Ahead of the Executive Board consideration of the Food Shock Window request the authorities will implement several reforms to strengthen governance and transparency These include publishing budget execution reports publishing the results of a stock take of South Sudan s external debt publishing the Auditor General s report on the second RCF disbursement and starting to address its findings and recommendations as well as strengthening the process for contracting external debt and issuing sovereign guarantees The combination of continued localized conflict four consecutive years of severe flooding and the rising price of staple commodities from Russia s war in Ukraine has increased the number of people experiencing severe food insecurity to an estimated 8 3 million in 2022 over two thirds of the population For this reason the authorities have committed to collaborate with trusted development partners to channel US 20 million of the RCF disbursement to make use of their existing systems to provide immediate humanitarian assistance to help address food insecurity Significant reforms have been introduced since the start of the Staff Monitored Program in March 2021 such for example the unification of the official and parallel exchange rates Fiscal pressures however led to the temporary resumption of overdrafts from the central bank and a return to the use of oil advances to finance the budget during the final quarter of FY2021 22 The rise in the money supply due to monetary financing triggered a significant depreciation of the exchange rate which has compounded external price pressures in an economy that is heavily reliant on imported goods The IMF mission is encouraged by the actions taken by the Ministry of Finance and Planning and the Bank of South Sudan since August 2022 to restore fiscal discipline and rein in money growth which has stabilized the exchange rate in recent months Going forward it will be critical for the authorities to continue prudent fiscal and monetary policies and to consolidate and build on the first steps taken under the SMP to improve public financial management The IMF mission met with the Minister of Finance and Planning Mr Dier Tong Ngor Minister of Petroleum Mr Puot Kang Chol Governor of the Bank of South Sudan Mr Johnny Ohisa Damian Commissioner General of the National Revenue Authority Mr Patrick Mugoya Auditor General Mr Steven Wondu and other high level government officials and representatives of the diplomatic community private sector and civil society The IMF team thanks the authorities for their hospitality and the productive discussions
    International Monetary Fund (IMF) Reaches Staff-Level Agreement with the Republic of South Sudan on the Third Review of the Staff-Monitored Program, a Rapid Credit Facility through the Food Shock Window and Program Monitoring with Board Involvement
    Africa2 months ago

    International Monetary Fund (IMF) Reaches Staff-Level Agreement with the Republic of South Sudan on the Third Review of the Staff-Monitored Program, a Rapid Credit Facility through the Food Shock Window and Program Monitoring with Board Involvement

    IMF staff and the South Sudanese authorities have reached a staff-level agreement for about US$112.7 million in emergency financing through the IMF’s new Food Shock Window of the Rapid Credit Facility combined with a Program Monitoring with Board Involvement; This emergency financing under the new Food Shock Window will help South Sudan address food insecurity, support social spending, and boost international reserves.

    The Program Monitoring with Board Involvement will support economic policies aimed at maintaining macroeconomic stability and debt sustainability; South Sudan’s request for emergency support is subject to approval by IMF management and the Executive Board in the coming weeks.

    Ahead of the Executive Board consideration of this request, the authorities will implement several reforms to strengthen governance and transparency.

    An International Monetary Fund (IMF) staff team, led by Mr. Niko Hobdari, visited South Sudan from November 7 to November 17, 2022.

    The team held discussions with the authorities on an existing Staff-Monitored Program (SMP) and on the authorities’ request for access to emergency financing through the new Food Shock Window of the Rapid Credit Facility (RCF) to address urgent balance of payments needs.

    The IMF team also discussed South Sudan’s request for a 9-month Program Monitoring with Board Involvement (PMB).

    At the end of the visit, Mr. Hobdari issued the following statement: “The IMF staff team and the South Sudanese authorities have reached staff-level agreement for completing the third and final review of the SMP and on economic policies for a disbursement under the IMF’s new Food Shock Window of the RCF that would be combined with a 9-month PMB.

    The disbursement is subject to approval by the IMF’s Executive Board, which will discuss it in the coming weeks.

    Upon approval by the Executive Board, South Sudan would have access to about US$112.7 million (SDR 86.1 million).

    These resources will be used predominantly to help address food insecurity, support social spending, and boost international reserves.

    This disbursement will bring total outstanding Fund credit under emergency financing instruments to South Sudan to SDR 246.0 million, or 100 percent of its quota at the IMF.

    “Ahead of the Executive Board consideration of the Food Shock Window request, the authorities will implement several reforms to strengthen governance and transparency.

    These include publishing budget execution reports; publishing the results of a stock take of South Sudan’s external debt; publishing the Auditor General’s report on the second RCF disbursement and starting to address its findings and recommendations; as well as strengthening the process for contracting external debt and issuing sovereign guarantees.

    “The combination of continued localized conflict, four consecutive years of severe flooding, and the rising price of staple commodities from Russia’s war in Ukraine has increased the number of people experiencing severe food insecurity to an estimated 8.3 million in 2022 (over two-thirds of the population).

    For this reason, the authorities have committed to collaborate with trusted development partners to channel US$20 million of the RCF disbursement to make use of their existing systems to provide immediate humanitarian assistance to help address food insecurity.

    “Significant reforms have been introduced since the start of the Staff-Monitored Program in March 2021, such for example the unification of the official and parallel exchange rates.

    Fiscal pressures, however, led to the temporary resumption of overdrafts from the central bank and a return to the use of oil advances to finance the budget during the final quarter of FY2021/22.

    The rise in the money supply due to monetary financing triggered a significant depreciation of the exchange rate, which has compounded external price pressures in an economy that is heavily reliant on imported goods.

    “The IMF mission is encouraged by the actions taken by the Ministry of Finance and Planning and the Bank of South Sudan since August 2022 to restore fiscal discipline and rein in money growth, which has stabilized the exchange rate in recent months.

    Going forward, it will be critical for the authorities to continue prudent fiscal and monetary policies and to consolidate and build on the first steps taken under the SMP to improve public financial management.

    “The IMF mission met with the Minister of Finance and Planning Mr. Dier Tong Ngor, Minister of Petroleum Mr. Puot Kang Chol, Governor of the Bank of South Sudan Mr. Johnny Ohisa Damian, Commissioner General of the National Revenue Authority Mr. Patrick Mugoya, Auditor General Mr. Steven Wondu, and other high-level government officials, and representatives of the diplomatic community, private sector, and civil society.

    The IMF team thanks the authorities for their hospitality and the productive discussions.

  •   The IMF Executive Board completed the first review under the Extended Credit Facility ECF arrangement for Mozambique providing the country with access to SDR 45 44 million about US 59 26 million The three year ECF arrangement aims to support the economic recovery reduce public debt and financing vulnerabilities and foster higher and more inclusive growth through structural reforms All end June 2022 program performance criteria indicative targets and the structural benchmark were met The monetary policy stance and proactive tightening since early 2021 are deemed appropriate to address higher than expected inflation The Executive Board of the International Monetary Fund IMF concluded the first review under the three year ECF arrangement for Mozambique 1 The Board also completed the financing assurances review and approved the authorities request for modification of conditionality 2 This allows for the immediate disbursement of SDR 45 44 million about US 59 26 million usable for budget support bringing Mozambique s total disbursements under the ECF arrangement to SDR 113 6 million about US 150million Growth is projected to increase in 2022 with the strengthening economic recovery despite the worsening international economic environment and rising commodity prices reflecting a strong vaccination campaign and full lifting of COVID related restrictions in July 2022 Inflation has risen to double digits driven by global fuel and food prices and tropical storms that impacted domestic food supply in the second quarter Fiscal developments in 2022 are broadly aligned with expectations with strong revenue and contained spending Large liquefied natural gas LNG investments are driving the current account The first LNG project started production in November 2022 Program implementation has been strong despite the challenging environment with completion of important program commitments in the areas of fiscal governance and anti corruption Risks to the outlook are significant but balanced Passthrough of fuel and food inflation to other prices social unrest terrorism activity in the north and natural disasters are downside risks balanced by upside risks from the strengthening recovery strong prospects for LNG demand and scope for higher than expected non LNG growth in the medium term Following the Executive Board discussion Mr Bo Li Deputy Managing Director and Acting Chair made the following statement The economic recovery is strengthening supported by a successful COVID vaccination campaign Program performance has been strong with all quantitative targets and the structural benchmark met at end June While the outlook remains positive driven by large liquefied natural gas LNG projects significant risks remain including from adverse climate events and fragile security situation Governance weaknesses and debt vulnerabilities also pose challenges In that context continued capacity development and donor support remain imperative for Mozambique to achieve its development objectives Solid revenue performance and spending restraint helped align fiscal outcomes with program objectives The authorities fiscal policy reforms will contribute to medium term fiscal consolidation A broader VAT base will help secure buoyant and diversified revenues independent of commodity prices Reforming public sector remuneration will improve efficiency in delivering public services and create space for other spending priorities over time Revenue administration and public financial management reforms are also essential to achieve fiscal policy objectives The draft Sovereign Wealth Fund law is a welcome step to develop a transparent accountable and efficient framework for managing LNG receipts Additional efforts are needed to mitigate revenue volatility continue strengthening public investment management and integrating natural resource revenues into the broader fiscal framework The monetary policy stance and proactive tightening since early 2021 are appropriate to manage inflation expectations The Monetary Policy Consultation Clause MPCC upper inflation band was breached due to the rise in global fuel and food prices and the impact of domestic floods on food production Continued caution is warranted to ensure adherence to program targets on reserves going forward Additional exchange rate flexibility would help absorb external shocks Progress continues across the governance and anti corruption agenda The authorities are implementing their action plans to address shortfalls in the AML CFT framework and Mozambique s grey listing by the Financial Action Task Force Amending the public probity law and continued implementation of recommendations from the audit of COVID spending are near term priorities The climate policy agenda is being articulated and efforts should continue in integrating climate resilience criteria in public investment and project selection Table 1 Mozambique Selected Economic Indicators 2019 23 2019 2020 2021 2022 2023 National Income and Prices Nominal GDP MT billion 963 983 1 033 1 142 1 292 Real GDP growth percentage change 2 3 1 2 2 3 3 8 5 0 Consumer price index percentage change end of period 3 5 3 5 6 7 15 0 8 5 Government Operations percent of GDP Total revenue 29 0 23 9 25 7 25 7 25 9 Total expenditure and net lending 29 8 32 9 31 5 33 2 33 3 Overall balance after grants 0 3 5 4 4 8 3 7 3 9 Primary Balance after grants 3 5 2 3 2 1 0 2 0 7 Public sector debt 99 0 120 0 107 0 102 9 101 4 of which external 79 4 97 8 82 8 77 6 75 9 Money and Credit Reserve money percentage change 19 1 9 0 14 4 5 1 11 2 M3 Broad Money percentage change 12 1 23 6 2 8 2 3 11 8 Credit to the economy percentage change 5 0 14 8 3 0 3 0 11 5 Credit to the economy percent of GDP 24 0 27 0 26 5 24 6 24 3 External Sector percentage change Merchandise exports 10 2 23 1 55 6 38 9 2 5 Merchandise exports excluding megaprojects 8 3 22 0 42 7 14 7 8 6 Merchandise imports 9 5 12 9 33 2 70 1 35 5 Merchandise imports excluding megaprojects 9 3 4 5 37 8 10 2 0 6 External current account after grants percent of GDP 19 1 27 3 23 6 41 5 14 7 Net international reserves millions of U S dollars end of period 3 605 3 493 2 927 Gross international reserves millions of U S dollars end of period 3 884 4 070 3 470 1 Arrangements under the ECF provide financial assistance that is more flexible and better tailored to the diverse needs of low income countries LICs including in times of crisis e g protracted balance of payments problems 2 The 36 month ECF arrangements was approved in May 2022 Press Release
    International Monetary Fund (IMF) Executive Board Concludes the First Review under the Extended Credit Facility Arrangement for the Republic of Mozambique
      The IMF Executive Board completed the first review under the Extended Credit Facility ECF arrangement for Mozambique providing the country with access to SDR 45 44 million about US 59 26 million The three year ECF arrangement aims to support the economic recovery reduce public debt and financing vulnerabilities and foster higher and more inclusive growth through structural reforms All end June 2022 program performance criteria indicative targets and the structural benchmark were met The monetary policy stance and proactive tightening since early 2021 are deemed appropriate to address higher than expected inflation The Executive Board of the International Monetary Fund IMF concluded the first review under the three year ECF arrangement for Mozambique 1 The Board also completed the financing assurances review and approved the authorities request for modification of conditionality 2 This allows for the immediate disbursement of SDR 45 44 million about US 59 26 million usable for budget support bringing Mozambique s total disbursements under the ECF arrangement to SDR 113 6 million about US 150million Growth is projected to increase in 2022 with the strengthening economic recovery despite the worsening international economic environment and rising commodity prices reflecting a strong vaccination campaign and full lifting of COVID related restrictions in July 2022 Inflation has risen to double digits driven by global fuel and food prices and tropical storms that impacted domestic food supply in the second quarter Fiscal developments in 2022 are broadly aligned with expectations with strong revenue and contained spending Large liquefied natural gas LNG investments are driving the current account The first LNG project started production in November 2022 Program implementation has been strong despite the challenging environment with completion of important program commitments in the areas of fiscal governance and anti corruption Risks to the outlook are significant but balanced Passthrough of fuel and food inflation to other prices social unrest terrorism activity in the north and natural disasters are downside risks balanced by upside risks from the strengthening recovery strong prospects for LNG demand and scope for higher than expected non LNG growth in the medium term Following the Executive Board discussion Mr Bo Li Deputy Managing Director and Acting Chair made the following statement The economic recovery is strengthening supported by a successful COVID vaccination campaign Program performance has been strong with all quantitative targets and the structural benchmark met at end June While the outlook remains positive driven by large liquefied natural gas LNG projects significant risks remain including from adverse climate events and fragile security situation Governance weaknesses and debt vulnerabilities also pose challenges In that context continued capacity development and donor support remain imperative for Mozambique to achieve its development objectives Solid revenue performance and spending restraint helped align fiscal outcomes with program objectives The authorities fiscal policy reforms will contribute to medium term fiscal consolidation A broader VAT base will help secure buoyant and diversified revenues independent of commodity prices Reforming public sector remuneration will improve efficiency in delivering public services and create space for other spending priorities over time Revenue administration and public financial management reforms are also essential to achieve fiscal policy objectives The draft Sovereign Wealth Fund law is a welcome step to develop a transparent accountable and efficient framework for managing LNG receipts Additional efforts are needed to mitigate revenue volatility continue strengthening public investment management and integrating natural resource revenues into the broader fiscal framework The monetary policy stance and proactive tightening since early 2021 are appropriate to manage inflation expectations The Monetary Policy Consultation Clause MPCC upper inflation band was breached due to the rise in global fuel and food prices and the impact of domestic floods on food production Continued caution is warranted to ensure adherence to program targets on reserves going forward Additional exchange rate flexibility would help absorb external shocks Progress continues across the governance and anti corruption agenda The authorities are implementing their action plans to address shortfalls in the AML CFT framework and Mozambique s grey listing by the Financial Action Task Force Amending the public probity law and continued implementation of recommendations from the audit of COVID spending are near term priorities The climate policy agenda is being articulated and efforts should continue in integrating climate resilience criteria in public investment and project selection Table 1 Mozambique Selected Economic Indicators 2019 23 2019 2020 2021 2022 2023 National Income and Prices Nominal GDP MT billion 963 983 1 033 1 142 1 292 Real GDP growth percentage change 2 3 1 2 2 3 3 8 5 0 Consumer price index percentage change end of period 3 5 3 5 6 7 15 0 8 5 Government Operations percent of GDP Total revenue 29 0 23 9 25 7 25 7 25 9 Total expenditure and net lending 29 8 32 9 31 5 33 2 33 3 Overall balance after grants 0 3 5 4 4 8 3 7 3 9 Primary Balance after grants 3 5 2 3 2 1 0 2 0 7 Public sector debt 99 0 120 0 107 0 102 9 101 4 of which external 79 4 97 8 82 8 77 6 75 9 Money and Credit Reserve money percentage change 19 1 9 0 14 4 5 1 11 2 M3 Broad Money percentage change 12 1 23 6 2 8 2 3 11 8 Credit to the economy percentage change 5 0 14 8 3 0 3 0 11 5 Credit to the economy percent of GDP 24 0 27 0 26 5 24 6 24 3 External Sector percentage change Merchandise exports 10 2 23 1 55 6 38 9 2 5 Merchandise exports excluding megaprojects 8 3 22 0 42 7 14 7 8 6 Merchandise imports 9 5 12 9 33 2 70 1 35 5 Merchandise imports excluding megaprojects 9 3 4 5 37 8 10 2 0 6 External current account after grants percent of GDP 19 1 27 3 23 6 41 5 14 7 Net international reserves millions of U S dollars end of period 3 605 3 493 2 927 Gross international reserves millions of U S dollars end of period 3 884 4 070 3 470 1 Arrangements under the ECF provide financial assistance that is more flexible and better tailored to the diverse needs of low income countries LICs including in times of crisis e g protracted balance of payments problems 2 The 36 month ECF arrangements was approved in May 2022 Press Release
    International Monetary Fund (IMF) Executive Board Concludes the First Review under the Extended Credit Facility Arrangement for the Republic of Mozambique
    Africa2 months ago

    International Monetary Fund (IMF) Executive Board Concludes the First Review under the Extended Credit Facility Arrangement for the Republic of Mozambique

    The IMF Executive Board completed the first review under the Extended Credit Facility (ECF) arrangement for Mozambique, providing the country with access to SDR 45.44 million (about US$59.26 million); The three-year ECF arrangement aims to support the economic recovery, reduce public debt and financing vulnerabilities, and foster higher and more inclusive growth through structural reforms; All end-June 2022 program performance criteria, indicative targets and the structural benchmark were met.

    The monetary policy stance and proactive tightening since early 2021 are deemed appropriate to address higher than expected inflation.

    The Executive Board of the International Monetary Fund (IMF) concluded the first review under the three-year ECF arrangement for Mozambique. 

    [1] The Board also completed the financing assurances review and approved the authorities’ request for modification of conditionality. 

    [2] This allows for the immediate disbursement of SDR 45.44 million (about US$59.26 million), usable for budget support, bringing Mozambique’s total disbursements under the ECF arrangement to SDR 113.6 million (about US$150million).

    Growth is projected to increase in 2022, with the strengthening economic recovery despite the worsening international economic environment and rising commodity prices, reflecting a strong vaccination campaign and full lifting of COVID-related restrictions in July 2022.

    Inflation has risen to double digits, driven by global fuel and food prices and tropical storms that impacted domestic food supply in the second quarter.

    Fiscal developments in 2022 are broadly aligned with expectations, with strong revenue and contained spending.

    Large liquefied natural gas (LNG) investments are driving the current account.

    The first LNG project started production in November 2022.

    Program implementation has been strong, despite the challenging environment, with completion of important program commitments in the areas of fiscal governance and anti-corruption.

    Risks to the outlook are significant but balanced.

    Passthrough of fuel and food inflation to other prices, social unrest, terrorism activity in the north and natural disasters are downside risks, balanced by upside risks from the strengthening recovery, strong prospects for LNG demand, and scope for higher-than-expected non-LNG growth in the medium-term.

    Following the Executive Board discussion, Mr. Bo Li, Deputy Managing Director and Acting Chair, made the following statement: “The economic recovery is strengthening, supported by a successful COVID vaccination campaign.

    Program performance has been strong, with all quantitative targets and the structural benchmark met at end-June. While the outlook remains positive, driven by large liquefied natural gas (LNG) projects, significant risks remain, including from adverse climate events and fragile security situation.

    Governance weaknesses and debt vulnerabilities also pose challenges.

    In that context, continued capacity development and donor support remain imperative for Mozambique to achieve its development objectives.

    “Solid revenue performance and spending restraint helped align fiscal outcomes with program objectives.

    The authorities’ fiscal policy reforms will contribute to medium-term fiscal consolidation.

    A broader VAT base will help secure buoyant and diversified revenues independent of commodity prices.

    Reforming public sector remuneration will improve efficiency in delivering public services and create space for other spending priorities over time.

    Revenue administration and public financial management reforms are also essential to achieve fiscal policy objectives.

    “The draft Sovereign Wealth Fund law is a welcome step to develop a transparent, accountable, and efficient framework for managing LNG receipts.

    Additional efforts are needed to mitigate revenue volatility, continue strengthening public investment management, and integrating natural resource revenues into the broader fiscal framework.

    “The monetary policy stance and proactive tightening since early 2021 are appropriate to manage inflation expectations.

    The Monetary Policy Consultation Clause (MPCC) upper inflation band was breached due to the rise in global fuel and food prices and the impact of domestic floods on food production.

    Continued caution is warranted to ensure adherence to program targets on reserves going forward.

    Additional exchange rate flexibility would help absorb external shocks.

    “Progress continues across the governance and anti-corruption agenda.

    The authorities are implementing their action plans to address shortfalls in the AML/CFT framework and Mozambique’s grey listing by the Financial Action Task Force.

    Amending the public probity law and continued implementation of recommendations from the audit of COVID spending are near-term priorities.

    “The climate policy agenda is being articulated and efforts should continue in integrating climate resilience criteria in public investment and project selection.” Table 1.

    Mozambique: Selected Economic Indicators, 2019–23 2019 2020 2021 2022 2023 National Income and Prices Nominal GDP (MT billion) 963 983 1,033 1,142 1,292 Real GDP growth (percentage change) 2.3 -1.2 2.3 3.8 5.0 Consumer price index (percentage change, end of period) 3.5 3.5 6.7 15.0 8.5 Government Operations (percent of GDP) Total revenue 29.0 23.9 25.7 25.7 25.9 Total expenditure and net lending 29.8 32.9 31.5 33.2 33.3 Overall balance, after grants 0.3 -5.4 -4.8 -3.7 -3.9 Primary Balance after grants 3.5 -2.3 -2.1 -0.2 -0.7 Public sector debt 99.0 120.0 107.0 102.9 101.4 of which: external 79.4 97.8 82.8 77.6 75.9 Money and Credit Reserve money (percentage change) 19.1 9.0 -14.4 -5.1 11.2 M3 (Broad Money) (percentage change) 12.1 23.6 2.8 2.3 11.8 Credit to the economy (percentage change) 5.0 14.8 3.0 3.0 11.5 Credit to the economy (percent of GDP) 24.0 27.0 26.5 24.6 24.3 External Sector (percentage change) Merchandise exports -10.2 -23.1 55.6 38.9 -2.5 Merchandise exports, excluding megaprojects 8.3 -22.0 42.7 14.7 8.6 Merchandise imports 9.5 -12.9 33.2 70.1 -35.5 Merchandise imports, excluding megaprojects 9.3 -4.5 37.8 10.2 -0.6 External current account, after grants (percent of GDP) -19.1 -27.3 -23.6 -41.5 -14.7 Net international reserves (millions of U.S. dollars, end of period) 3,605 3,493 2,927 … … Gross international reserves (millions of U.S. dollars, end of period) 3,884 4,070 3,470 … … [1] Arrangements under the ECF provide financial assistance that is more flexible and better tailored to the diverse needs of low-income countries (LICs), including in times of crisis (e.g., protracted balance of payments problems).

    [2] The 36-month ECF arrangements was approved in May 2022 ( Press Release).

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