Press Briefing Transcript: Julie Kozack, Director, Communications Department, March 6, 2025

Egypt

With respect to the question on the exchange rate, what I can say there is that the Japanese authorities have affirmed their commitment to a flexible exchange rate regime. Japan's flexible exchange rate regime has helped the country or has helped the economy absorb the impact of shocks. And it also supports the focus of monetary policy on price stability. And at the same time, what I can say is that that flexible exchange rate regime is helping maintain an external position that is in line with fundamentals.

QUESTIONER: Could you give us an update on the negotiations for Ethiopia, please? And on El Salvador, the deal that you agreed on in December and was approved a couple of weeks ago involves the government not increasing its exposure to Bitcoin. Government has continued to buy through the Office of Bitcoin, which is linked to the presidential palace. But yesterday the Fund said that these purchases do not increase the government's exposure to Bitcoin. Could you please explain that?

QUESTIONER: Also on El Salvador, obviously he was saying to not to not buy it as a government reserve. I just wanted to, I guess, contrast to the U.S. I mean, President Trump has very much announced a digital assets reserve, including Ethereum and other coins, as well as Bitcoin. And I wondered if the IMF could – can you comment on the U.S. program or how would you distinguish the two countries and why the IMF might be taking a different approach?

MS. KOZACK: All right, let me go ahead and take the El Salvador question in Ethiopia and then we will go back. I see many hands up online.

So, on El Salvador, as you know, last week our Executive Board approved a 40-month Extended Fund Facility, EFF, for U.S. $1.4 billion and with an immediate disbursement of $113 million. The program is expected to catalyze financial and technical support from other IFIs. And this will lead to a combined total over the program period of about U.S. $3.5 billion of support for El Salvador. The goals of the program are to restore fiscal sustainability, rebuild external and financial buffers, strengthen governance and transparency, and ultimately create the conditions for stronger and more resilient growth.

Regarding Bitcoin, in particular, the program aims to address the risks associated with the Bitcoin project to protect consumers and investors, as well as to limit potential fiscal costs. So, to start, there were recent legal reforms that have made the acceptance of Bitcoin voluntary, and taxes can be paid only in U.S. dollars. Under the program, the government has committed to not accumulate for their Bitcoins at the level of the overall public sector.

Regarding the recent increase in Bitcoin holding by the Strategic Bitcoin Reserve Fund, the authorities have confirmed that these are consistent with the agreed program conditionality, and we do remain engaged with the authorities on this important issue.

And then, to your question. We are obviously closely monitoring President Trump's announcement in this area. The Presidential Working Group on Digital Asset Markets has not yet completed its work. So, we do not yet have details on the implementation of this proposal, but we will come back in due course.

And then turning to the question on Ethiopia. So just an update on Ethiopia. On January 17th, the IMF Executive Board completed the Second Review of the arrangement, the ECF arrangement for Ethiopia, and that allowed for a drawdown of about U.S. $245 million. The ECF arrangement supports the authorities' reforms to address macroeconomic imbalances, restore external debt sustainability, and lay the foundation for strong private sector-led growth.

I can also just remind you that the Managing Director recently traveled to Ethiopia. She was there February 8th and 9th. She met with Prime Minister Abiy and his team to take stock of the economic reforms and the progress that is being made in the country. And she also took the opportunity to meet with other stakeholders, including representatives of the private sector.

QUESTIONER: My question is on USAID. USAID has now totally stopped its business. And to what extent do you see the impact, especially on lower income countries at the global level? And should you consider using your facility to support them just in case?

MS. KOZACK: So, on this issue, we are obviously again paying close attention to developments, and we are working with our country authorities. But it is, at the same time, it is too early to really say what the precise impact may be. And so, we will come back in due course. For now, we are monitoring.

QUESTIONER: I have a question on Senegal. Following a recent audit of the country's debt, it was found to be 99.7 percent of GDP. That was in 2023. And I know that IMF has said before that Senegal debt was stable even though it was high. I am wondering if that is the figure that you still consider sustainable. And then also with regards on talks of a new IMF program, I am wondering if Senegal could be asked to reimburse previous dispersion under this reporting period.

QUESTIONER: Still on Senegal, as soon as the report from the Audit Supreme Court was released, we saw rating agency downgrading Senegal sovereign notes. So, the country is now stuck. It cannot raise funds from the internal market, and it cannot go in a very comfortable position in international markets while they still face a lot of challenges. So, I am wondering why the IMF is working fast and bold to find a solution for Senegal in the midterm or even long-term. Is there any situation where IMF can provide a short-term, I mean, short-term relief to the country so they can go through these hard moments in a very soft way?

MS. KOZACK: So, on Senegal, what I can say is that we are actively engaged in discussions with the authorities with respect to the Court of Auditors Report and the associated misreporting under the IMF program. The Court of Auditors Report was released on February 12th. The Court confirmed that the fiscal deficit and debt were under reported during the period of 2019 to 2023.

So, what we are doing is working closely with the authorities in their efforts to preserve fiscal and debt sustainability. We are working actively to advance on our discussions following the publication of the report, and we are also working with the authorities on measures to correct and remedy the misreporting that took place. What I can add is that the resolution of the misreporting in line with IMF policy is a precondition for discussions of any future financial assistance by the IMF.

And with respect to potential consequences, I can say that the IMF does not impose any sanctions for misreporting cases. It is up to our Executive Board to decide on the next steps. And those next steps, you know, could include a waiver. And that waiver could — it could also include; it could be a waiver without a request for reimbursement. So, all of those discussions on Senegal are now underway. We are actively, very much working with the authorities, supporting as much as possible their efforts on fiscal and debt sustainability, as I said. And we will come back and report back when we have more information on Senegal.

I have a question here online that I am going to read. It came from the Press Center on Thailand. And the question is - ‘The upcoming World Bank IMF Annual Meetings in Thailand will bring significant attention to Southeast Asia's economic outlook. From the from IMF's perspective, how can Thailand best leverage this opportunity to address regional challenges such as digital transformation, climate change adaptation, and income inequality? And what collaborative initiatives between the IMF and Thailand are being planned to ensure lasting economic benefits for the country beyond the meetings themselves?’

So, on this very important question, a very nice question, actually, what I can say is that we are very much looking forward to having Thailand host the annual meetings in 2026. So, this will be in October of 2026. Every three years, we do our Annual Meetings abroad. 2026, October will be Thailand. So, mark your calendar. I can also add that preparations are underway. The Fund, the IMF staff are working hand in hand with the Thai authorities to make this a highly successful event and showcasing the significant strides that Thailand has made since it last hosted our annual meetings in 1991. So, it will be 35 years when we get to 2026.

The Managing Director recently met with Bank of Thailand's Governor Sethaput at the AlUla Conference in Saudi Arabia. They discussed the preparations for the annual meetings and agreed that it would be a very good opportunity to showcase on the global stage the region's dynamism and economic activities. And of course, the meetings will also allow Thailand to position itself as a key contributor to the international economic dialogue and to gather views and experiences from countries throughout the membership of the IMF and the World Bank.

This ongoing close relationship leading up to and beyond, we hope, the Annual Meetings will focus on prioritizing reform reforms that are necessary to ensure the lasting benefits for Thailand and building the relationships and the shared policy, dialogue and experiences we hope will deepen our engagement, our excellent engagement and relationship with Thailand and will be sustained even past the Annual Meetings in 2026.

QUESTIONER: My question is, what are the IMF growth projections for Jordan amid the ongoing impact of the Gaza war? And when will the Third Review under the EFF begin? And are any adjustments expected to the war's region effect on Jordan's economy?

MS. KOZACK: So, what I can share on Jordan is that the Executive Board on December 12th completed the Article IV Consultation with Jordan and the Second Review under the EFF arrangement. The mission for the next review, which will be the Third Review, is expected to take place in April.

What I can also say is that Jordan has demonstrated resilience and maintained macroeconomic stability throughout the prolonged regional conflict. This resilience reflects the authority’s continued implementation of sound macroeconomic policies and progress with reforms. While recent developments in the region, particularly the ceasefire agreements, give rise to some cautious optimism, uncertainty, of course, in Jordan does remain high. And with respect to the growth projections, what I can say is that growth in 2024 was 2.3 percent. We are projecting growth at 2.5 percent in 2025 and a further increase in growth in 2026 to 3 percent. But like in all countries, we will be updating these projections as both part of our April World Economic Outlook Global Forecast, and also, of course, the team will be doing a full assessment of the Jordanian economy as part of their mission in April

And so, with this, I'm going to bring this press briefing to a close. Thank you all very much. Thank you very much for participating today. As a reminder, the briefing is embargoed until 11 a.m. Eastern Time in the U.S. The transcript, as always, will be made available later today on IMF.org. And in case of clarifications or additional questions, please reach out to my colleagues at [e-mail]. And I wish everyone a wonderful day, and I look forward to seeing you next time. Thank you very much.

SOURCE International Monetary Fund (IMF)

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