The International Monetary Fund (IMF) will remain "vigilant" in monitoring the global economic situation by broadening surveillance and improving its crisis prevention capacity, the IMF managing director said.
In a prepared statement released to the media on May 28, on the Fund's work program, Horst Koehler said that the issues the IMF executive board plans to examine include the risk of possible deflation and the impact of Severe Acute Respiratory Syndrome (SARS) on the economies of member countries.
He said that the IMF will work to support reconstruction, macroeconomic stability and growth in Iraq, and make "every effort" to contribute to the success of World Trade Organization (WTO) trade liberalization negotiations.
To strengthen the framework for crisis resolution, Koehler said, the first priority is to encourage the use of collective action clauses (CAC) in international sovereign bonds. CACs limit the ability of dissident creditors to block a widely supported restructuring of an individual bond issue.
In the area of surveillance and crisis prevention, Koehler said, the IMF will explore a number of issues including precautionary arrangements, dollarization of an economy and foreign direct investment. It also plans to review progress on financial soundness indicators and the Fund's transparency policy, he said.
In addition, the IMF work program will focus on the Fund's role in low-income countries, program design and conditionality, and the Fund's quotas, finances and cooperative nature, Koehler said. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
