IMF Latest: Yellen, PBOC’s Pan Hold Substantive, Productive Talk

US Treasury Secretary Janet Yellen and Pan Gongsheng, governor of the People’s Bank of China, held talks Friday in Marrakech, Morocco, extending a series of high-level meetings that could lead to another summit for Presidents Joe Biden and Xi Jinping next month.

(Bloomberg) — US Treasury Secretary Janet Yellen and Pan Gongsheng, governor of the People’s Bank of China, held talks Friday in Marrakech, Morocco, extending a series of high-level meetings that could lead to another summit for Presidents Joe Biden and Xi Jinping next month.

“During the substantive and productive meeting, Secretary Yellen and Governor Pan exchanged views on macroeconomic and financial developments,” a Treasury spokesperson said in a statement after the two officials met on the sidelines of annual meetings for the International Monetary Fund and World Bank, which are being held in Africa for the first time in 50 years.

Leaders of the global economy are at the talks to discuss challenges including poverty reduction, climate change and easing the debt burden of the world’s poorest nations. The ongoing Israel-Hamas war is adding additional uncertainty to the global outlook.

Egypt Seeks to Boost IMF Loan (12:41 p.m.)

Egypt is in talks with the IMF on augmenting its rescue program to over $5 billion, according to people familiar with the discussions, confident it can overcome the roadblocks facing its existing package by addressing concerns including its currency policy. 

Any announcement on a potential increase from the $3 billion secured last year would only come after Egypt completes its two delayed program reviews, said the people, who asked not to be identified as the matter is confidential. No decision has yet been made, they said.

Africa To Feel Impact Of Slowing China, IMF Says (11:15 a.m.)

Sub-Saharan Africa’s growth will be hit by China’s slowing economy, the IMF said, urging countries in the region to do more to adapt to slowing import demand and declining Chinese economic engagement.

A one percentage point decline in China’s real GDP growth rate leads to about 0.25 percentage point decline in in sub-Saharan Africa’s total GDP growth within a year, IMF economists including Hany Abdel-Latif wrote in a report. Oil exporters would experience the largest impact, it added.

IMF Warns of Spillover From China’s Property Woes (11:02 a.m.)

IMF economists warned that China’s real estate sector downturn could erode growth prospects in the Asia Pacific region, which is already seeing signs of its recovery losing steam. 

“In the near term, the sharp adjustment in China’s heavily indebted property sector and the resulting slowdown in economic activity will likely spill over to the region, particularly to commodity exporters with close trade links to China,” IMF economists Yan Carrière-Swallow and Krishna Srinivasan wrote in a report.

IMF Aims to Cut Time for Creditor Assurance (10:11 a.m)

The IMF’s chief set an ambitious target to reduce the time needed to agree on deals to help poorer nations in debt distress, following criticism it’s been taking too long to aid the world’s neediest nations.  

Managing Director Kristalina Georgieva said she wants to reduce to just 2-3 months the time between when countries with distressed debt reach a staff-level deal with the institution to when they secure the creditor assurances needed for loan approval.


Visco Says Italy Spreads Don’t Require Intervention (9:31 a.m.)

Italy’s widening bond spread levels aren’t worrying and won’t require intervention from the European Central Bank, Governing Council member Ignazio Visco said.

“There are no signs really,” the Italian central bank chief told Bloomberg TV. If central bank intervention were needed, “I think we can” do so, he said Friday in Marrakech.

World Bank Head Seeks Record Help Aiding Poorest Nations (9:20 a.m.)

World Bank President Ajay Banga urged the lender’s members to make record contributions in the next funding round for its arm that helps the 75 poorest nations, warning of declining progress in the fight against poverty. 

“We are pushing the limits” of the International Development Association, Banga said in Marrakech, Morocco, according to remarks prepared for the plenary of the bank’s annual meeting Friday. “No amount of creative financial engineering will compensate for the fact that we need more funding.” 

Deutsche Bank Sees Hard Times for Commercial Property (09:06 a.m.)

Chief Executive Officer Christian Sewing said commercial real estate is facing tough times in the years ahead as higher interest rates roil the market.

The asset class “will actually go through more difficult timing for the next couple of years,” Sewing told Bloomberg TV’s Francine Lacqua in an interview from Marrakech. That’s because of higher rates and a trend for increased home office work in the wake of the Covid pandemic, he said.

G-20 Finance Chiefs Omit Mention of Israel-Hamas War (00:04 a.m.)

Group of 20 finance chiefs agreed on a communique that didn’t mention the Israel-Hamas war, the latest sign of the forum’s struggle to address conflicts seen as threats to the global economy.

The statement provided late on Thursday by the G-20 secretariat, which is helmed this year by India, comes on the eve of the end of an official meeting this week in Morocco.

IMF Bungles Zambia Deal Announcement (Oct. 12, 7:19 p.m.)

Zambia is close to signing an agreement to reorganize its loans with official creditors, the IMF said, clarifying an earlier comment by the lender’s managing director.

The parties are close to finalizing the $6.3 billion deal reached in principle in June, which would pave the way for the disbursement of another portion of a $1.3 billion IMF extended credit facility. Chief Kristalina Georgieva earlier on Thursday said that the accord with official creditors, co-led by China and France, had been signed.

–With assistance from Eric Martin, Craig Stirling, Abeer Abu Omar, Jana Randow, Mirette Magdy, Martha Beck, Kamil Kowalcze, Ana Monteiro and Ekow Dontoh.

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