(WASHINGTON,D.C.) IMF REPORT: Global Crypto Regulation Should be Comprehensive, Consistent, and Coordinated #AceNewsDesk report

#AceNewsReport – Dec.14: Crypto assets and associated products and services have grown rapidly in recent years. Furthermore, interlinkages with the regulated financial system are rising. Policymakers struggle to monitor risks from this evolving sector, in which many activities are unregulated. In fact, we think these financial stability risks could soon become systemic in some countries.

#AceDailyNews IMF Report: Uncoordinated regulatory measures may facilitate potentially destabilizing capital flows…..


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The IMF’s mandate is to safeguard the stability of the international monetary and financial system, and crypto assets are changing the system profoundly.

While the nearly $2.5 trillion market capitalization indicates significant economic value of the underlying technological innovations such as the blockchain, it might also reflect froth in an environment of stretched valuations. Indeed, early reactions to the #Omicron variant included a significant crypto selloff.

By Tobias AdrianDong He, and Aditya Narain

Financial system risks from crypto assets

Determining valuation is not the only challenge in the crypto ecosystem: identification, monitoring, and management of risks defy regulators and firms. These include, for example, operational and financial integrity risks from crypto asset exchanges and wallets, investor protection, and inadequate reserves and inaccurate disclosure for some stablecoins. Moreover, in emerging markets and developing economies, the advent of crypto can accelerate what we have called “cryptoization”—when these assets replace domestic currency, and circumvent exchange restrictions and capital account management measures.

Such risks underscore why we now need comprehensive international standards that more fully address risks to the financial system from crypto assets, their associated ecosystem, and their related transactions, while allowing for an enabling environment for useful crypto asset products and applications.

The Financial Stability Board, in its coordinating role, should develop a global framework comprising standards for regulation of crypto assets. The objective should be to provide a comprehensive and coordinated approach to managing risks to financial stability and market conduct that can be consistently applied across jurisdictions, while minimizing the potential for regulatory arbitrage, or moving activity to jurisdictions with easier requirements.

Crypto’s cross-sector and cross-border remit limits the effectiveness of national approaches. Countries are taking very different strategies, and existing laws and regulations may not allow for national approaches that comprehensively cover all elements of these assets. Importantly, many crypto service providers operate across borders, making the task for supervision and enforcement more difficult. Uncoordinated regulatory measures may facilitate potentially destabilizing capital flows.

Standard-setting bodies responsible for different products and markets have provided varying levels of guidance. For example, the Financial Action Task Force has issued guidance for a risk-based approach to mitigating financial integrity risks from virtual assets and their service providers. Actions by other standard-setting bodies range from broad principles for some types of crypto assets to rules for mitigating exposure risks of regulated entities and setting up information exchange networks. While useful, these efforts aren’t sufficiently coordinated towards a global framework for managing the risks to financial and market integrity, financial stability, and consumer and investor protection.

Making regulation work at the global level

The global regulatory framework should provide a level playing field along the activity and risk spectrum. We believe this should, for example, have the following three elements:

  • Crypto-asset service providers that deliver critical functions should be licensed or authorized. These would include storage, transfer, settlement, and custody of reserves and assets, among others, similar to existing rules for financial service providers. Licensing and authorization criteria should be clearly articulated, the responsible authorities clearly designated, and coordination mechanisms among them well defined.
  • Requirements should be tailored to the main use cases of crypto assets and stablecoins. For example, services and products for investments should have requirements similar to those of securities brokers and dealers, overseen by the securities regulator. Services and products for payments should have requirements similar to those of bank deposits, overseen by the central bank or the payments oversight authority. Regardless of the initial authority for approving crypto services and products, all overseers—from central banks to securities and banking regulators—need to coordinate to address the various risks arising from different and changing uses.
  • Authorities should provide clear requirements on regulated financial institutions concerning their exposure to and engagement with crypto. For example, the appropriate banking, securities, insurance, and pension regulators should stipulate the capital and liquidity requirements and limits on exposure to different types of these assets, and require investor suitability and risk assessments. If the regulated entities provide custody services, requirements should be clarified to address the risks arising from those functions.

Some emerging markets and developing economies face more immediate and acute risks of currency substitution through crypto assets, the so-called cryptoization. Capital flow management measures will need to be fine-tuned in the face of cryptoization. This is because applying established regulatory tools to manage capital flows may be more challenging when value is transmitted through new instruments, new channels and new service providers that are not regulated entities.

There is an urgent need for cross-border collaboration and cooperation to address the technological, legal, regulatory, and supervisory challenges. Setting up a comprehensive, consistent, and coordinated regulatory approach to crypto is a daunting task. But if we start now, we can achieve the policy goal of maintaining financial stability while benefiting from the benefits that the underlying technological innovations bring.

Crypto assets are potentially changing the international monetary and financial system in profound ways. The IMF has developed a strategy in order to continue to deliver on its mandate in the digital age. The Fund will work closely with the Financial Stability Board and other members of the international regulatory community to develop an effective regulatory approach to crypto assets.

#AceNewsDesk report ………..Published: Dec.14: 2021:

Editor says …Sterling Publishing & Media Service Agency is not responsible for the content of external site or from any reports, posts or links, and can also be found here on Telegram: https://t.me/acenewsdaily all of our posts fromTwitter can be found here: https://acetwitternews.wordpress.com/ and all wordpress and live posts and links here: https://acenewsroom.wordpress.com/and thanks for following as always appreciate every like, reblog or retweet and free help and guidance tips on your PC software or need help & guidance from our experts AcePCHelp.WordPress.Com

#cryptocurrency, #imf, #washington

(WORLDWIDE) G20 Debt Treatment Report: With the debt service suspension initiative expiring and interest rates poised to rise, low-income countries will find it increasingly difficult to service their debts #AceNewsDesk report

#AceNewsReport – Dec.06: Despite significant relief measures brought on by the #COVI19 crisis, about 60 percent of low-income countries are at high risk or already in debt distress. In 2015 that number was below 30 percent…..

#AceDailyNews says that #COVID19’s Toll leads to the #G20 Common Framework for Debt Treatments Must Be Stepped Up‘ With policy space tightening for highly indebted countries, the framework can and must deliver more quickly: – 2021 – 12-02T09:17:06-05:00: By Kristalina Georgieva & Ceyla Pazarbasioglu

For many of these countries, the challenges are mounting. New variants are causing further disruptions to economic activity. COVID-related initiatives such as the G20 Debt Service Suspension Initiative (DSSI) are ending. Many countries face arrears or a reduction in priority expenditures. We may see economic collapse in some countries unless G20 creditors agree to accelerate debt restructurings and suspend debt service while the restructurings are being negotiated. It is also critical that private sector creditors implement debt relief on comparable terms.

2022: a more challenging debt outlook

Recent experiences of Chad, Ethiopia, and Zambia show that the Common Framework for debt treatments beyond the DSSI must be improved. Quick action is needed to build confidence in the framework and provide a road map for helping other countries facing increasing debt vulnerabilities.

Since the start of the pandemic, low-income countries have benefited from some attenuating measures. Domestic policies, together with low interest rates in advanced economies mitigated the financial impact of the crisis on their economies. The G20 put in place the DSSI to temporarily pause official debt payments to the poorest countries, followed by the Common Framework to help these countries restructure their debt and deal with insolvency and protracted liquidity problems. The international community also scaled-up its financial support, including record IMF emergency lending and a $650 billion allocation of special drawing rights, or SDRs—$21 billion of which was allocated directly to low-income countries. The G20 leaders committed to support low-income countries with onlending $100 billion of their SDRs to significantly magnify this impact.

No doubt 2022 will be much more challenging with the tightening of international financial conditions on the horizon. The DSSI will expire at the end of this year forcing participating countries to resume debt service payments. Countries will need to transition to strong programs, and for low-income countries that need comprehensive debt treatment, the Common Framework will be critical to unlock IMF financing.

But the Common Framework is yet to deliver on its promise. This requires prompt action.

Implementation so far has been slow

The Common Framework is intended to deal with insolvency and protracted liquidity problems, along with the implementation of an IMF-supported reform program. G20 official creditors—both traditional “Paris Club” creditors, such as France and the United States, and new creditors, such as China and India, which, as shown in the chart below, overtook the Paris Club as lenders in the last decade—agreed to coordinate to provide debt relief consistent with the debtor’s capacity to pay and maintain essential spending needs. The Common Framework requires private creditors to participate on comparable terms to overcome collective action challenges and ensure fair burden sharing.

But so far, only three countries—Chad, Ethiopia, and Zambia—have made requests for debt relief under the Common Framework. And each case has experienced significant delays.

In part, these delays reflect the problems that motivated the creation of the Common Framework in the first place. These include coordinating Paris Club and other creditors, as well as multiple government institutions and agencies within creditor countries, which can slow down decisions. The Common Framework aims to mitigate these problems but does not eliminate them. New creditors, including relevant domestic institutions, need to gain comfort with restructuring processes that would allow all creditors to work together in providing relief and enable the IMF to lend to countries facing debt difficulties. This takes time.

But there were also delays for reasons that have nothing to do with the Common Framework. To restore debt sustainability, Chad must restructure a large, collateralized obligation held by a private company, which is partly syndicated to a large number of banks and funds. This complicates the decision-making process. Domestic challenges slowed progress in Ethiopia and Zambia.

No time to waste

With policy space tightening for highly indebted countries, the framework can and must deliver more quickly.

First, greater clarity on the different steps and timelines in the Common Framework process is vital. Alongside earlier engagement of official creditors with the debtor and with private creditors, this would help accelerate decision making.

Second, a comprehensive and sustained debt service payment standstill for the duration of the negotiation would provide relief to the debtor at a time when it is under stress, as well as incentivize faster procedures to get to the actual debt restructuring.

Third, the Common Framework should clarify further how the comparability of treatment will be effectively enforced, including as needed through implementation of the IMF arrears policies, so as to give greater comfort to creditors and debtors.

Last but not least, the Common Framework should be expanded to other highly-indebted countries that can benefit from creditor coordination. Timely and orderly debt resolution is in the interest of both debtors and creditors.

Ensuring a success in the early cases will not only benefit the countries, but foster confidence in the Common Framework. In that regard, finalizing Chad’s restructuring quickly can serve as an essential precedent for other countries. In Ethiopia, the creditor committee should continue the technical work that will allow early provision of debt relief assurances once the situation stabilizes. In Zambia, G20 creditors should expeditiously form a committee of official creditors and begin engaging with the authorities and private creditors on debt relief, while also providing a temporary debt-service suspension for the duration of the debt-restructuring discussions. Otherwise, the country would be confronted with the impossible choice of cutting priority expenditures or piling up arrears.

Debt challenges are pressing and the need for action is urgent. The recent Omicron variant is a stark reminder that the pandemic will be with us for a while. Determined multilateral action is needed now to address vaccine inequality globally and also to support timely and orderly debt resolution. For its part, the IMF is ready to work with the World Bank and all our partners to help ensure the framework delivers for the people it was put in place to help.

#AceNewsDesk report ………….Published: Dec.06: 2021:

Editor says …Sterling Publishing & Media Service Agency is not responsible for the content of external site or from any reports, posts or links, and can also be found here on Telegram: https://t.me/acenewsdaily all of our posts fromTwitter can be found here: https://acetwitternews.wordpress.com/ and all wordpress and live posts and links here: https://acenewsroom.wordpress.com/and thanks for following as always appreciate every like, reblog or retweet and free help and guidance tips on your PC software or need help & guidance from our experts AcePCHelp.WordPress.Com

#imf, #worldwide

(WORLDWIDE) IMF REPORT: Clean energy needs may cause years of high prices for copper, nickel, cobalt, and lithium under a net-zero emissions scenario #AceNewsDesk report

#AceNewsReport – Nov.14: The world’s historic pivot toward curbing carbon emissions is likely to spur unprecedented demand for some of the most crucial metals used to generate and store renewable energy in a net-zero emissions by 2050 scenario.

#AceDailyNews says according to a post in IMF Blog …..Soaring Metal Prices May Delay Energy Transition with unprecedented demand for some crucial metals to store renewable energy …..

2021-11-11T16:01:43-05:00(Photo: Petmal/iStock by Getty Images)

By Lukas BoerAndrea Pescatori Martin Stuermer and Nico Valckx


Prices could reach historical peaks for an unprecedented length of time—and even delay the energy transition itself.

A resulting surge in prices for materials such as cobalt and nickel would bring boom times to some economies that are the biggest exporters—but soaring costs could last through the end of this decade and could derail or delay the energy transition itself.

Prices for industrial metals, an important foundation for the global economy, have already seen a major post-pandemic rally as economies re-opened, as we recently wrote. Our latest research, included in the October World Economic Outlook and a new IMF staff paper, details the likely effects of the energy transition for metals markets and the economic impact for producers and importers.

For example, lithium, used in batteries for electric vehicles, could rise from its 2020 level around $6,000 a metric ton to about $15,000 late this decade—and stay elevated through most of the 2030s. Cobalt and nickel prices would also see similar surges in coming years.

Net-zero scenario

We look specifically at the goal of limiting global temperature increases to 1.5 degrees Celsius, which requires a transformation of the energy system that could substantially raise metals demand as low-emission technologies—including renewable energy, electric vehicles, hydrogen, and carbon capture—require more metals than fossil-fuel counterparts.

Our focus is on four important metals among the variety being used for the transition. They are copper and nickel, major established metals that have traded on exchanges for decades, and minor-but-rising lithium and cobalt, which have traded on exchanges only recently but are gaining popularity because they are important for the energy transition.

The fast pace of change needed to meet climate goals, such as the International Energy Agency’s (IEA) Net Zero by 2050 Roadmap, implies soaring metals demand in the next decade. Under the roadmap’s ambitious scenario, lithium and cobalt consumption jumps more than sixfold to satisfy needs for batteries and other clean energy uses. Copper use would double and nickel’s would quadruple, though this includes meeting needs unrelated to clean energy.

Metal prices

While metals demand could soar, supply typically reacts slowly to pricing signals, partly depending on production. Copper, nickel, and cobalt come from mines, which require intensive investment and take on average more than a decade from discovery to production according to the IEA. In contrast, lithium often is extracted from mineral springs and brine via salty water pumped from below ground. That shortens lead times for new production to average roughly five years. Supply trends also are influenced by extraction technology innovation, market concentration, and environmental regulations. The combination of soaring demand and slower supply changes can spur prices to climb. In fact, if mining had to satisfy consumption under the IEA’s net-zero scenario, our recent analysis shows prices could reach historical peaks for an unprecedented length of time—and those higher costs could even delay the energy transition itself.

Specifically, cobalt, lithium, and nickel prices would rise several hundred percent from 2020 levels and peak around 2030. However, copper is less of a bottleneck as its demand increases are not as steep. We estimate prices would peak as in 2011, though be elevated for longer.

The demand surge under a net-zero scenario is frontloaded because renewable energy components such as wind turbines or batteries need metals upfront. On the supply side, however, production is slow to react due to the long lead times for opening mines, and only eventually eases market tightness after 2030.


Under a net-zero emissions scenario, booming demand for the four energy transition metals alone would boost their production value sixfold to $12.9 trillion over two decades. This could rival the roughly estimated value of oil production in a net-zero scenario over that period. The four metals could affect the economy via inflation, trade and output, and provide significant windfalls to commodity producers.

The concentrated supply of metals implies some top producers may benefit. Usually, countries with the largest output have the greatest reserves, and likely would be major prospective producers. The Democratic Republic of the Congo, for example, accounts for about 70 percent of global cobalt output and half of reserves. Other standouts include Australia, for its lithium, cobalt, and nickel; Chile, for copper and lithium; along with Peru, Russia, Indonesia and South Africa.

A long-lasting metals boom could also bring substantial economic gains, especially for large exporters. In fact, we estimate that a persistent 10 percent rise in the IMF metal price index adds an extra two-thirds of a percentage point to the pace of economic growth experienced by metals exporting countries relative to importing ones. Exporters also would see a similar magnitude of improvement for government fiscal balances from royalties or tax revenues.

Policy implications

The high uncertainty surrounding demand scenarios is an important caveat. Technological change is hard to predict, and the speed and direction of the energy transition depends on the evolution of policy decisions. Such ambiguity is detrimental because it may hinder mining investment and raise the odds that high metal prices derail or delay the energy transition.

A credible, globally coordinated climate policy; high environmental, social, labor, and governance standards; and reduced trade barriers and export restrictions would allow markets to operate efficiently. This would direct investment to sufficiently expand metal supply, avoiding unnecessarily cost increases for low-carbon technologies and aiding the clean energy transition.

Finally, an international body with a mandate covering metals—analogous to the IEA for energy or the UN Food and Agriculture Organization—could play a key role in data dissemination and analysis, setting industry standards, and fostering global cooperation.

#AceNewsDesk report …………..Published: Nov.14: 2021:

Editor says …Sterling Publishing & Media Service Agency is not responsible for the content of external site or from any reports, posts or links, and can also be found here on Telegram: https://t.me/acenewsdaily all of our posts fromTwitter can be found here:  https://acetwitternews.wordpress.com/ and all wordpress and live posts and links here: https://acenewsroom.wordpress.com/and thanks for following as always appreciate every like, reblog or retweet and free help and guidance tips on your PC software or need help & guidance from our experts AcePCHelp.WordPress.Com

#carbon, #emissions, #energy, #imf, #metals, #worldwide

(WASHINGTON D.C.) Afghanistan Financial Report: The World Bank announced it is halting financial support to Afghanistan amid worries about the fate of the country under #Taliban rule, CNN reported #AceNewsDesk report

#AceNewsReport – Aug.29: The Afghan economy relies heavily on foreign aid and now faces rising food prices. ……

#AceDailyNews ….World Bank is deeply concerned about the situation in Afghanistan and the impact on the country’s development prospects, especially for women,” World Bank spokesperson Marcela Sanchez-Bender said in a statement to CNN Business this followed the IMF’s decision on Thursday to prevent any further funding being provided

The World Bank has committed more than $5.3 billion for development projects in Afghanistan, according to the organization’s website. The Afghanistan Reconstruction Trust Fund, administered by the World Bank, has raised more than $12.9 billion.

“We have paused disbursements in our operations in Afghanistan and we are closely monitoring and assessing the situation in line with our internal policies and procedures,” Sanchez-Bender said. 

The World Bank said it will continue to consult with the international community and development partners. 

The International Monetary Fund suspended Afghanistan’s access to IMF resources, including around $440 million in new monetary reserves, due to a lack of clarity over the country’s government after the Taliban took control of Kabul, Reuters reported on Thursday.  

The IMF’s announcement came amid pressure from the US Treasury, which holds a controlling share in the fund, to ensure that Afghanistan’s share of a Special Drawing Rights reserves allocation scheduled for Monday not fall into Taliban hands.  

“There is currently a lack of clarity within the international community regarding recognition of a government in Afghanistan, as a consequence of which the country cannot access SDRs or other IMF resources,” an IMF spokesperson said in an emailed statement as quoted by Reuters.  

“As is always the case, the IMF is guided by the views of the international community,” the spokesperson added.  

According to the Reuters report, the fund has traditionally relied on its membership to decide whether to engage with governments that take power in coups or disputed elections.  

Even if Afghanistan were to regain access to the SDRs, it would be unlikely the Taliban could spend those resources because that would require another country to be willing to exchange the SDRs for underlying currencies, a transaction that would likely be blocked by long-standing US financial sanctions against the Taliban, according to Reuters. 

#AceNewsDesk report ………Published: Aug.29: 2021:

Editor says …Sterling Publishing & Media Service Agency is not responsible for the content of external site or from any reports, posts or links, and can also be found here on Telegram: https://t.me/acenewsdaily all of our posts fromTwitter can be found here: https://acetwitternews.wordpress.com/ and all wordpress and live posts and links here: https://acenewsroom.wordpress.com/and thanks for following as always appreciate every like, reblog or retweet and free help and guidance tips on your PC software or need help & guidance from our experts AcePCHelp.WordPress.Com

#imf, #taliban, #washington, #world-bank

(CHICAGO) CBP REPORT: Over the last two days, August 22 and 23, officers found more counterfeit badges; this time after they intercepted 26 counterfeit DEA badges #AceNewsDesk report

#AceNewsReport – Aug.26: CBP inspected 25 parcels to determine the admissibility of the contents. Officers seized a total of 26 badges all destined for locations across the U.S to include: Washington, Iowa, Kentucky, Florida, California, New Jersey, New York, Pennsylvania, Michigan, Virginia, Indiana, Ohio, Texas, and Illinois. These shipments were all arriving from China and were sent by the same shipper from the previous week…

#AceDailyNews reports that Chicago CBP Seizes Counterfeit DEA Badges, Again! Just last weekend, U.S. Customs and Border Protections (CBP) officers at the Chicago International Mail Branch (IMF) seized eight Drug Enforcement Administration (DEA) badges and one FBI badge.


“These seizures are an example of the vigilance demonstrated by CBP officers every day at our nation’s international mail facilities and express consignment operation hubs,” said LaFonda Sutton-Burke, Director, Field Operations-Chicago. “Finding these and ensuring dangerous criminals can’t use these badges for illegal activity is further proof of how CBP protects our nations communities.”

“It is hard to know what dangerous and illicit activity these badges could have been used for,” said Shane Campbell, Area Port Director – Chicago. “Criminals could have used these badges in a variety of ways, and all would have had horrific outcomes.”

CBP officers coordinate findings with CBP’s Fraudulent Document Analysis Unit, Homeland Security Investigations, and other federal partners to combat any illicit activity.

#AceNewsDesk report …….Published: Aug.26: 2021:

Editor says …Sterling Publishing & Media Service Agency is not responsible for the content of external site or from any reports, posts or links, and can also be found here on Telegram: https://t.me/acenewsdaily all of our posts fromTwitter can be found here: https://acetwitternews.wordpress.com/ and all wordpress and live posts and links here: https://acenewsroom.wordpress.com/and thanks for following as always appreciate every like, reblog or retweet and free help and guidance tips on your PC software or need help & guidance from our experts AcePCHelp.WordPress.Com

#cbp, #chicago, #dea, #imf

(ARGENTINA) JUST IN: Goverment to launch legal action against ex-president over IMF loan #AceNewsDesk report

#AceNewsReport – Apr.11: In addition, lawyers were instructed to initiate actions leading to compensation for possible losses incurred as a result of the actions of the previous authorities.

‘Prosecutors representing the state as the claimant are ordered to pursue the case, ‘Mauricio Macri and others, fraud against state bodies’ … and to facilitate the advancement of the criminal process in order to determine those responsible for the crime,” the decree says’

The International Monetary Fund logo is seen inside its headquarters at the end of the IMF/World Bank annual meetings in Washington, U.S., October 9, 2016

© REUTERS / Yuri GripasIMF Assesses Argentina’s Debt to Be UnsustainableThe document further states that the case is related to Marci’s decision to take a loan from the IMF in the amount of $50 billion in 2018. The current government has repeatedly spoken about the difficulties surrounding paying off the debt and began negotiations with the IMF on a new assistance program.

The decree was signed by the country’s current president, prime minister, and ministers of economy and justice.

#AceNewsDesk report …………Published: Apr.11: 2021:

Editor says #AceNewsDesk reports by https://t.me/acenewsdaily and all our posts, also links can be found at here for Twitter and Live Feeds https://acenewsroom.wordpress.com/ and thanks for following as always appreciate every like, reblog or retweet and free help and guidance tips on your PC software or need help & guidance from our experts AcePCHelp.WordPress.Com

#argentina, #fraud, #imf

(WASHINGTON) Press Release Statement Report:The International Monetary Fund (IMF) has warned of a stark divergence in economic growth prospects for advanced economies versus low-income and developing countries #AceNewsDesk report

#AceNewsReport – Apr.01: FACT SHEET: How An Allocation of International Monetary Fund Special Drawing Rights Will Support Low-Income Countries, the Global Economy, and the United States


April 1, 2021: Contact: Alexandra LaManna; Press@Treasury.gov

#CoronavirusNewsDesk#COVID19 #pandemic has taken an extraordinary toll on the global economy and has strained financial liquidity. Global growth contracted 3.5% in 2020—the worst peace-time recession since the Great Depression—and will likely inflict long-term scars on the global economy

The International Monetary Fund (IMF) has warned of a stark divergence in economic growth prospects for advanced economies versus low-income and developing countries. Overall, the IMF projects that 150 economies will have per-capita incomes below their 2019 levels in 2021.

An allocation of IMF Special Drawing Rights (SDRs) would help build reserve buffers, smooth adjustments, and mitigate the risks of economic stagnation in global growth. Importantly, it could also enhance liquidity for low-income and developing countries to facilitate their much-needed health recovery efforts.

Containing the pandemic across the globe is paramount to a robust economic recovery. To this end, Treasury is working with IMF management and other members toward a $650 billion general allocation of SDRs to IMF member countries. Addressing the long-term global need for reserve assets would help support the global recovery from the COVID-19 crisis. A strong global recovery would also increase demand for U.S. exports of goods and services—creating U.S. jobs and supporting U.S. firms.

An SDR allocation is not a catch-all solution.  It is part of a package of broader international efforts to support the global recovery.  This package also includes robust support from the IMF, multilateral development banks, and debt relief in some cases—all alongside countries taking necessary reform steps.  Bilateral assistance and debt relief under the G20 Debt Service Suspension Initiative and Common Framework, as well as financial support to the COVID-19 Vaccines Global Access (COVAX) Facility, all remain integral to help prevent long-term scarring from the pandemic and worsening global wealth divergence. 

As part of our support for an SDR allocation, Treasury is working with the IMF and other member countries to maximize the benefits and limit the possible downsides of an allocation by enhancing transparency, accountability, and equitable burden sharing.

Below are some common questions about the nature and uses of SDRs and the mechanics of an SDR allocation.  For more information on SDRs please see the IMF’s Factsheet available here.  

Question:  Is the Administration trying to bypass Congress in approving an SDR allocation?  

Answer:  As required by U.S. law, the Administration is consulting Congress on our proposed support for an SDR allocation.  Under the Special Drawing Rights Act, Congress has authorized the Secretary of the Treasury to support an SDR allocation without additional legislation where the amount allocated to the United States does not exceed the current U.S. quota in the IMF in the applicable five-year basic period.  The proposed SDR allocation is below this level.  Based on current global liquidity conditions, Treasury does not support an additional SDR allocation beyond the proposed $650 billion at this time.  Treasury would only consider an additional SDR allocation beyond the proposed $650 billion at some point in the future if circumstances justify it at that time.  

Question:  Does an SDR allocation impose a large financial burden on the United States?

Answer:  An allocation itself imposes no direct cost on the United States.  Based on a $650 billion allocation, the United States will receive about $113 billion in SDRs.  The idea that an SDR allocation imposes a financial burden arises from potential exchanges of SDRs for U.S. dollars.  If countries wish to sell their SDRs to the United States in exchange for dollars, Treasury would exchange SDRs for dollars held in the Exchange Stabilization Fund (ESF).  The U.S. cash position would decline, and federal borrowing requirements would increase.  However, the United States would also earn interest on the SDRs we purchased, largely (and perhaps entirely) offsetting any increase in Treasury’s borrowing costs.  This is the case with our existing SDR resources, and the same process would occur with a new allocation.  The differential between the SDR interest rate and the interest rate on Treasuries varies over time, so at times there is a small cost and at other times a small benefit to Treasury.[1]  This potential implicit cost is much lower than the benefits of a strong global recovery. 

Question:  Will the United States be required to exchange dollars for SDRs with any IMF member on demand?

Answer:  Treasury has agreed to voluntarily purchase SDRs up to a certain level from other IMF members to promote an orderly system of exchange rates and to help provide liquidity support to our global partners.  The United States retains the right to refuse to purchase SDRs from any country whose policies run counter to U.S. interests.  Many large countries, such as most advanced economies and China, already hold excess SDRs and are very unlikely to request to exchange their new SDRs for hard currency.   

Even if there is strong demand for dollars after the potential allocation, the United States is not alone in voluntarily agreeing to purchase SDRs.  The IMF spreads the transactions across 32 members who have similar voluntary arrangements.  We are working with the IMF to further ensure our potential transactions are proportional to others’ commitments. 

Question:  Is there a need for an SDR allocation to support global reserves?

Answer:  In 2016, the IMF estimated the global reserves gap to be $430 billion to $1.4 trillion.  This shortfall of international reserves is likely larger now.  In addition, many low-income and developing countries remain constrained in their ability to issue debt in international markets, either to replenish reserves or to finance fiscal spending.  Providing reserves will help prevent countries from engaging in FX purchases that could weaken their currencies and lead to a further buildup of the U.S. trade and current account deficits.  

Question:  Is there a need for an SDR allocation given the global economy is recovering?

Answer:  After contracting 3.5% in 2020, the IMF projects a partial recovery in economic growth in 2021 of 5.5%.  Yet, this recovery faces significant downside risks, is uneven, and will leave global output below the pre-crisis level over the medium term.  Moreover, the global recession has strained central bank foreign exchange reserves in many countries.  The proposed SDR allocation will help buffer reserves, supporting governments’ efforts to address the health and economic crises.  Importantly, an SDR allocation will increase confidence and liquidity needed to promote a global recovery that benefits the American worker and U.S. economic growth.

Low-income and developing countries have been particularly hard hit in this crisis, and we face a critical window to prevent a permanent global divergence between rich and poor countries.  The pandemic is expected to reverse the progress made in poverty reduction across the past two decades with close to 90 million people expected to fall below the extreme poverty threshold during 2020-21.  Low-income countries have seen their real annual GDP growth decline by about 5% in 2020.  The IMF estimates that low-income countries will need to deploy around $200 billion over the next five years just to fight the pandemic and an additional $250 billion to return to the path of catching up with advanced economies.  The IMF forecasts the medium-term output losses for low-income countries will be about 6%, compared to 1% for advance economies.  The proposed SDR allocation, by providing liquidity and potential fiscal space, could help low-income and developing countries finance vaccines and other COVID-19 related spending.  

For more information see the IMF’s blog post on the pandemic’s legacy here.

Question:  Is an SDR allocation a cash giveaway?

Answer:  SDRs are neither money nor currency, but an international reserve asset.  SDRs are allocated by the IMF and only to IMF members and a limited number of international institutions.  SDRs cannot be exchanged by private entities, and all transactions involving SDRs must go through the IMF’s SDR Department.  To use SDRs, a country must find an IMF member willing to provide a usable currency (generally, dollars, euros, or yen) in exchange for SDRs.  The transaction is thus an exchange of assets.  The country pays an interest rate to the IMF if their SDR holdings are below its allocation.  

Question:  Does an SDR allocation only benefit rich countries, as opposed to the countries that need it?

Answer:  A $650 billion SDR allocation would provide about $21 billion worth of SDRs in liquidity support to low-income countries and about $212 billion to other emerging market and developing countries (excluding China), complementing existing multilateral efforts to assist countries in need.  By comparison, the G20/Paris Club Debt Service Suspension Initiative has delivered about $5 billion in liquidity relief to more than 40 eligible countries as of March 2021.  The IMF’s concessional lending provided about $13 billion in emergency financing in 2020.  

We are working with our international partners to pursue ways for advanced economies to lend a portion of their SDR allocation to support low-income countries.  For instance, during the current crisis, several countries have used part of their existing SDR holdings to expand the IMF’s concessional financing through loans to the IMF’s Poverty Reduction and Growth Trust’s (PRGT).  Total new PRGT loan resources mobilized since the start of the crisis amount to about $24 billion, of which about $15 billion is from existing SDRs.

Question:  Is there transparency and accountability in how SDRs are used?

Answer:  The IMF already reports the SDR holdings of each of its members on a monthly basis.  As part of our support for a new SDR allocation, Treasury is working with our international partners and the IMF on a number of initiatives to improve the transparency of SDR transactions and the effectiveness of how countries use SDRs.  For example, the IMF could expand quarterly country-level data on SDR transactions, breaking out the transactions that occurred each quarter by major categories (e.g., IMF operations and exchanges with other SDR holders).  Moreover, we are encouraging the IMF to publish an ex-ante guidance note on how countries could use and account for SDRs, consistent with macroeconomic and debt sustainability and good governance.  We are also urging the IMF to conduct an ex-post review of the results two years after the allocation to describe the various uses.  We are working closely with the IMF and other members to advance these initiatives.  

Question:  Is an SDR allocation a lifeline for dictators?

Answer:  The United States retains the right to refuse to purchase SDRs from any countries that we choose, including those under U.S. sanction regimes, and we are working to coordinate with other countries to do the same.  Because all IMF members receive an SDR allocation proportionate to their quota share, some countries whose policies the United States opposes will receive an SDR allocation.  However, these countries will not necessarily be able to exchange their SDRs for hard currencies.  First, the country’s authorities must be recognized by the IMF membership.  Then, the country would need to find a willing country to provide them with hard currency in exchange for their SDRs.  We are working to increase transparency around SDR exchanges.  

Question:  Will an SDR allocation put at risk the dollar’s reserve currency status?

Answer:  The dollar currently makes up 57% of global reserves, while SDRs only make up 2%.  After the proposed allocation, SDRs as a share of global reserves would only grow to around 7%, while dollars would comprise about 54%, more than three times the next most significant currency.  Additionally, restrictions on who can hold and transact SDRs and the IMF’s role in clearing all SDR transactions significantly limits the ability of the SDR to function as a replacement for the dollars’ reserve currency status.

#AceNewsDesk report ……….Published: Apr.01: 2021:

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#imf, #washington

CHINA: ‘ Surpasses US in Terms of Purchasing Power to become largest in the World ‘

#AceWorldNews – CHINA – October 12 – China has surpassed the US in terms of GDP based on purchasing power parity (PPP), becoming the largest in the world by this measure, International Monetary Fund estimates show.

' Chinese Purchasing Power Outstrips United States. Though United States has greater GDP'

‘ Chinese Purchasing Power Outstrips United States. Though United States has greater GDP’

In 2014 China reached $17.6 trillion or 16.48 percent of the world’s purchasing-power-adjusted GDP, while the US made slightly less, 16.28 percent or $17.4 trillion, the FT reported citing IMF data.

PPP is recognized as the best way to compare the size of economies rather than using volatile exchange rates, which rarely reflect the true cost of goods and services. Thus a trillion US dollars are worth a lot more in China than in the US.

On the purchasing power basis, China is overtaking the US right about now and becoming the world’s biggest economy, according to the forecast.

The US has been the global leader since overtaking the UK in 1872. Most economists previously thought China would pull ahead in 2019.

According to IMF estimates, in 2015 the gap between China and the US will increase to almost a trillion dollars: Chinese GDP PPP will amount to $19.23 trillion against $18.286 trillion in the US.

However in terms of a real GDP the United States remains the undisputed world leader with $16.8 trillion output, significantly outpacing China with $10.4 trillion.



#china, #gdp, #imf, #international-monetary-system-imf, #ppp, #purchasing-power-parity, #uk, #us

Russia experiencing recession now, says IMF

The IMF (International Monetary Fund) has basically said with all the sanctions on Russia, that Russia is now in a DEEP recession. Now if true, this will make it very hard for Russia to trade for War. Iran and others have been warned about trading with Russia. So, looks like these sanctions are biting hard! Facing an estimated £30 Million pound bill so far ($50 Million Dollars) this could push the Russian Republic to the brink of Civil war as people will start to go hungry and less medication and more. Links below as usual
Russia is “experiencing recession now” because of damage caused by the Ukraine crisis, the International Monetary Fund (IMF) has said. The fund, which cut its growth forecast for Russia, said $100bn (£59bn) would leave the country this year. Antonio Spilimbergo, the IMF’s mission chief in Moscow, said international sanctions were damaging the economy and threatening investment. Russia’s economy contracted in the first three months of this year. But Mr Spilimbergo said he expected that to continue.

“If you understand by recession two quarters of negative economic growth, then Russia is experiencing recession now,” he added. “The difficult situation and especially the uncertainty surrounding the geopolitical situation… and escalation of sanctions are weighing very negatively on the investment climate.” The IMF cut its 2014 growth forecast for Russia to 0.2% from 1.3% and said it expected the country’s economy to grow by only 1% next year. Credit ratings agency Standard & Poor’s has already cut Russia’s rating to one notch above “junk” status. And last week Russia’s central bank raised its key interest rate from 7% to 7.5% in an effort to defend the value of the rouble, which has lost more than 8% against the dollar so far this year.

Investor flight

IMF-Logo1Mr Spilimbergo said the interest rate rise would reduce the rate of inflation, but that it would not be enough to prevent consumer prices rising more than 6% in 2014. Russia itself has expressed concerns about investors moving money out of the country amid tensions and sanctions over its intervention in Ukraine. Its central bank said $64bn had left the country in the first quarter of the year – more than the capital outflows registered for the whole of 2013. The investor flight has partly been prompted by US and EU sanctionstargeting a number of Russian companies and high-profile business figures, including those close to President Vladimir Putin. The Russian government has retaliated with a warning that the sanctions could be damaging for Western energy firms. US Treasury Secretary Jack Lew has said the sanctions have so far caused “a quite substantial deterioration in Russia’s already weak economy”.





#russia, #100bn-59bn-lost-by-russia, #damage-caused-by-the-ukraine-crisis, #imf, #international-monetary-fund, #russia-falls-into-recession, #the-imf-cut-its-2014-growth-forecast-for-russia-to-0-2-from-1-3

` IMF : Pressures mounts to give `Green Light’ to an `Aid Program ‘ for Kiev ‘


#acefinancenews, #imf, #kiev

` Seven countries out of the `G8 ‘ have unnamiously condemned `Russia’s position on the Ukraine ‘ – Joint Statement.

#AceWorldNews says that Seven countries “Group of Eight” in a joint statement condemned Russia’s position on Ukraine and announced that it was suspending participation in the preparations for the summit in Sochi.

“We note that the actions of Russia in Ukraine contrary to the principles and values ​​on which the function G7 and G8.

Therefore, we decided to stop at the time of participation in activities to prepare for the summit scheduled for June in Sochi, until situation does not allow the “eight” to conduct meaningful discussions, “- said in a statement released by the White House on Monday.

The statement was signed by the leaders of Canada, France, Germany, Italy, Japan, UK and USA, as well as the European Council and the European Commission.

Russia’s G8 partners also urged Moscow to solve the concerns of its security and human rights associated with what is happening in Ukraine, by direct negotiation in the presence of international observers or through the UN and the OSCE.

Authors of the statement stressed that Russia ready to help in these efforts.

In addition, the statement called on all parties to the conflict Ukrainian “behave very responsibly and with restraint and reduce tensions.”

It says ready to support Kiev in restoring unity, stability, political and economic well-being, as well as in the negotiations with the IMF.

On Sunday, U.S. Secretary of State John Kerry said that Russia and all risks losing in G8, if not change its position on the Crimea.

“Russia may lose summit” Group of Eight “in Sochi. If the situation does not change, it is possible that even this country is excluded from the G8”, – he said in an interview with U.S. television channel NBC .

Kerry promised that the Russian authorities could face “the freezing of assets of Russian entrepreneurs, leaving American business from the Russian market.”

He also warned of the possibility of a further fall in the ruble. ”

“We’ll have to pay a huge price.
This is not a position of strength. If Russia wants to be a country of G8, it should behave as such – said the Secretary of State. – G8 plus some other countries – all of them are fully prepared expose Russia insulation for this intrusion, “- said U.S. Secretary of State.

Moscow. March 3. INTERFAX.RU


#crimea, #g8, #imf, #interfax, #kiev, #moscow, #osce, #russian, #sochi, #un, #us-secretary-of-state-john-kerry

` IMF will send fact find team to `Ukraine’ in response to countries request for financial support’

#AceWorldNews says the International Monetary Fund (IMF) will send a fact-finding team to Ukraine over the next few days in response to the country’s request for financial support, the IMF’s Managing Director Christine Lagarde said Thursday.

“This will enable the IMF to make its usual technical, independent assessment of the economic situation in Ukraine and, at the same time, begin to discuss with the authorities the policy reforms that could form the basis of a fund-supported program,” she said in a statement.


#christine-lagarde, #imf, #international-monetary-fund, #ukraine

Afghanistan:”Taliban Suicide Bomber and Gunmen Attacked Restaurant Killing Twenty One People Including Three UN Staff”

#AceWorldNews says (Reuters) – A Taliban suicide bomber and gunmen attacked a restaurant popular with foreigners in the heart of the Afghan capital Kabul, killing 21 people including three United Nations staff and the IMF’s top representative in Afghanistan.

Gunmen burst into the Lebanese restaurant spraying diners with bullets after the bomber blew himself up near the entrance around 7.30 p.m. on Friday, just as people sat down to dinner.

Thirteen foreigners were among those killed, according to police, and details about the victims began to trickle through on Saturday.

The U.S. embassy said on Twitter at least two U.S. private citizens were killed. Britain and Canada confirmed they each lost two nationals. Denmark said one of its citizens also died.

The American University of Afghanistan said two of its U.S. employees died in the attack on La Taverna du Liban, a popular dining spot whose charismatic owner, Kamal Hamade, was also killed.

#afghan, #afghanistan, #american, #britain, #canada, #denmark, #gunmen, #imf, #kabul, #lebanese, #reuters, #taliban, #un, #us