Country Reports
2021
October 7, 2021
Ecuador: 2021 Article IV Consultation, Second and Third Reviews Under the Extended Arrangement Under the Extended Fund Facility, Request for a Waiver of Nonobservance of Performance Criterion, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Ecuador
Description: The new administration has committed to continue with the Fund-supported Extended Fund Facility (EFF) of SDR 4,615 million (661 percent of quota, about $6.5 billion) that was approved by the IMF Executive Board on September 30, 2020. The authorities’ objectives under the program are to ensure an environmental-friendly growth with high quality jobs, promote a transparent management of public resources, and ensure equity in the conduct of fiscally sustainable policies. Upon the completion of the Second and Third Reviews under the EFF, an additional SDR $568 million would be made available.
October 5, 2021
Republic of Congo: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Congo
Description: The COVID-19 pandemic and oil price shocks have taken a deep toll on the Congolese economy, weighing on incomes and inequality. Debt sustainability challenges precluded Fund financial assistance during the pandemic, and the Extended Credit Facility (ECF) arrangement, approved in 2019, expired in April 2021 without having completed the first review. Recently, debt sustainability has been restored owing to the authorities’ debt restructuring strategy and current and projected higher oil prices. However, the risk of debt distress remains high given liquidity risks and vulnerabilities to negative oil price shocks. The authorities are actively negotiating the resolution of pending external arrears. Until this process is concluded and the negotiations with two external creditors are finalized, debt is classified as being “in distress.”
September 30, 2021
Georgia: Financial Sector Assessment Program-Technical Note-Stress Testing and Financial Stability Analysis
Description: This note presents the results of banks’ stress tests carried out jointly by the NBG and the FSAP teams in the context of the 2021 FSAP. It describes the scope, methodology and results of a series of top-down stress tests carried out during January‒April 2021. At the request of the Georgian authorities, complementary bottom-up exercises were not implemented, on account of the operational challenges facing banks because of the COVID-19 pandemic.
September 30, 2021
Georgia: Financial Sector Assessment Program-Technical Note-Macroprudential Policies and De-Dollarization
Description: Since the 2015 FSAP, the NBG has significantly strengthened its institutional framework for macroprudential policy and put in place a comprehensive toolkit. Among other reforms, to strengthen the transparency of and accountability for macroprudential policy, the NBG published its Macroprudential Policy Strategy in 2019, which sets out five intermediate objectives: (i) mitigating and preventing excessive credit growth and leverage; (ii) mitigating and preventing excessive maturity mismatch and market illiquidity; (iii) limiting direct and indirect exposure concentrations; (iv) limiting the systemic impact of misaligned incentives with a view to reducing moral hazard; and (v) reducing dollarization of the financial system.
September 30, 2021
Georgia: Financial Sector Assessment Program-Technical Note-Selected Issues in Banking Supervision
Description: This note was prepared for the 2021 FSAP mission to Georgia and provides recommendations on a select set of banking supervision topics against relevant elements of the Basel Core Principles for Effective Banking Supervision. The current review focused on implementation and effectiveness of recent changes to the Georgian banking supervisory framework, and included actions being taken or planned to address current challenges facing Georgian authorities.
September 30, 2021
Georgia: Financial Sector Assessment Program-Technical Note-Financial Safety Net, Resolution and Crisis Management
Description: Since the prior FSAP the authorities have comprehensively updated the legal, policy and procedural framework for failing bank resolution. In 2019 both the NBG and Banking Laws were amended to provide the authorities with powers to resolve banks that in the past might have been deemed too-big-to-fail; this eventuality is now greatly diminished. In 2017 a Deposit Insurance System Law was adopted to provide protection to natural person depositors when a bank fails and is liquidated. In 2020 the NBG published a series of rules specifying its policies and procedures for the use of its new powers, and jointly with the MoF published regulations addressing the use of temporary public funding to mitigate the potential systemic implications of bank failures.
September 27, 2021
Republic of Equatorial Guinea: Request for Purchase Under the Rapid Financing Instrument-Press Release; Staff Report; and Statement by the Executive Director
Description: Already battered by a still unfolding COVID-19 pandemic, Equatorial Guinea was struck on March 7 by massive accidental explosions at a military compound in Bata, its largest city, that killed over 100 people and caused widespread damage to surrounding neighborhoods. These shocks have adversely impacted economic activity and weakened considerably the fiscal and external positions, relative to the EFF-supported program approved in December 2019, creating a substantial financing gap. With the EFF-supported program off-track, as governance reforms have taken longer than originally envisaged, it is not feasible to effectively respond to the humanitarian crisis within the EFF framework. Bringing the program back on track would take time as the authorities continue to work on outstanding structural measures due to capacity constraints in the pandemic context and need for consensus building. Support provided under the RFI, buttressed by appropriate prior actions on governance and safeguards, would create the fiscal space necessary for the authorities to meet the immediate humanitarian needs, and reinvigorate engagement under the EFF-supported program.