0358 GMT May 27, 2022
IMF Managing Director Christine Lagarde said she's ‘delighted’ that US Treasury Secretary Steve Mnuchin wants her organization to increase transparency on trade imbalances and debt sustainability in countries like China, an effort she said is already underway, CNBC wrote.
"It's clearly a project that we have been working on, that we will continue to work on, and I'm delighted that he's supporting us," Lagarde said in a Facebook Live interview with CNBC at the IMF Spring Meetings in Washington.
In a statement on Friday from the IMF meetings, US Treasury Secretary Steven Mnuchin urged the IMF to "step up to the plate" to call out countries engaged in unfair trade practices — a frequent refrain from the Trump administration is that its trade penalty threats are not protectionist, but simply seeking ‘fair’ exchange.
Mnuchin additionally proposed the IMF and World Bank should develop an action plan to address growing debt associated with Chinese lending.
"Increasingly we see instances where LICs (low-income countries) have borrowed excessively, and unsustainably, from large, often non-transparent emerging sovereign creditors like China and/or private creditors," the statement said.
Lagarde issued a warning over record-high global debt, which reached $164 trillion according to the IMF's latest Fiscal Monitor.
"We need to really keep our finger on that pulse and make sure that we understand where the liabilities are," she said.
Lagarde said transparency between governments and institutions is essential for the IMF to achieve its mission of global financial stability.
"I think truth and transparency for me are the two key pillars of where we need to go and how we need to help because we are here to serve the countries that have started this institution," she said.
Lagarde added that digitalization can help improve transparency and efficiency within governments when it comes to collecting revenue, but she warned digital technologies need to be used for ‘good’.
"Digital, to the extent that it cuts out the middle man, to the extent that it brings money to the surface of the transaction, is extremely helpful," she said.