Transcript: IMF Managing Director Kristalina Georgieva on “Face the Nation,” March 13, 2022

The next is a transcript of an interview with Kristalina Georgieva, managing director of the Worldwide Financial Fund, that aired Sunday, March 13, 2022, on “Face the Nation.”

MARGARET BRENNAN: Final week, harsh monetary sanctions and commerce restrictions have been put in place to punish Russia and cripple its financial system. Amongst them, the banning of all Russian imports of oil, gasoline, and coal, in addition to items like vodka and caviar. Becoming a member of us now could be the managing director of the IMF, Kristalina Georgieva. Welcome to FACE THE NATION. 


MARGARET BRENNAN: I’m wondering how one can calculate the entire affect of all of those restrictions which have been placed on Russia. I imply, it- will Russia default on its money owed and what affect will that must the worldwide financial system?

KRISTALINA GEORGIEVA:  Let’s do not forget that the rationale they’re unprecedented sanctions is as a result of the unthinkable occurred, a devastating battle in Ukraine. And the affect of the sanctions is sort of extreme for the Russian financial system. We anticipate a deep recession in Russia, and this abrupt contraction is affecting already how the Russian inhabitants is taking the warmth on them. The ruble depreciated considerably. What does it imply? Actual incomes have shrunk. Buying energy of the Russian inhabitants has considerably diminished. When it comes to servicing debt obligations, I can say that now not we consider Russian default as unbelievable occasion. Russia has the cash to service its debt, however can not entry it. What I am extra involved is that there are penalties that transcend Ukraine and Russia.

MARGARET BRENNAN: Proper. I imply, you’ve gotten stated that the disaster in Ukraine may trigger famine in Africa, for instance, you take a look at the wheat imports and the worth spikes there. Which nations all over the world are you most involved about? Is that this going to destabilize different governments?

KRISTALINA GEORGIEVA: What we’re principally involved about are the rapid neighbors of Russia and Ukraine, the Central Asian republics, the Caucasus, Moldova, as a result of they’ve commerce relations with each Russia and Ukraine greater than the remainder of the world, and due to this outflow of individuals refugee wave in Europe, that’s of the order of magnitude of what occurred within the Second World Battle. So there the affect is most important. Past the rapid neighbors, there are two teams of nations we’re very anxious. The primary group are nations which have but to recuperate from the COVID-induced financial disaster. For them, this shock is especially painful. And the second group of nations are these which are extra depending on power imports from Russia, as a result of there the affect on consumption, but in addition on inflation goes to be extra distinguished.

MARGARET BRENNAN: Are we wanting, due to the debt ranges you speak about, the vulnerability, are we wanting on the potential of this turning into a monetary disaster for the remainder of the world?

KRISTALINA GEORGIEVA: For now, no. Once you take a look at the entire publicity of banks to Russia, it’s a few hundred and twenty billion {dollars}. Not negligent, however undoubtedly not systemically related. And to what we’re additionally seeing is that whereas inevitably we’re going to downgrade our development projections for 2022, it’s nonetheless going to be a constructive development price. For nations which have been quick to recuperate from the COVID disaster, like the USA, development is strong. It’s people who have been falling behind the place the affect is extra extreme. And let me say this, sure, battle in Ukraine means starvation in Africa, however battle in Ukraine additionally has social implications for a lot of, many nations by way of the three channels which are already demonstrably impactful. One, commodity costs, power, grains, fertilizers, metals to the affect that has on inflation and in nations the place inflation has already been excessive, that is dramatic–


KRISTALINA GEORGIEVA: Like United States, like many rising market nations, consider Brazil, Mexico and three, what can we do when we’ve got to struggle inflation? We tighten monetary circumstances.

MARGARET BRENNAN: I’ve a query for you. You’ve got been engaged on emergency funding for Ukraine. If that authorities falls, can Russia seize that cash? If Russia installs a puppet authorities in Ukraine, can they get entry to that cash?

KRISTALINA GEORGIEVA: We’re pondering of our inside interactions with Ukraine as being very productive. We have now offered 1.4 billion {dollars} in emergency financing into the Ukrainian particular account with the IMF. In different phrases, it’s being drone by the federal government of Ukraine and no one else can contact it. And we see that the Ukrainian authorities have been exceptional. Margaret, we had negotiations on this 1.4 billion and my employees tells me they will hear the air raid sirens and but works go on. I’ve household in Ukraine. They inform me they will nonetheless pull cash from again house. That is even within the metropolis of Kharkiv that’s the second-largest, closely bombarded metropolis. So bravo to the Ukrainian authorities for what they do.

MARGARET BRENNAN: Director, thanks in your time this morning. 


MARGARET BRENNAN: We’ll be monitoring that ongoing story.

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