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INTERNATIONALMONETARY FUND

(IMF)


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INTRODUCTION

IMF was established on December 27, 1945.

It started functioning from March 1, 1947.

Its headquarters are in Washington, UnitedStates.


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History

Economies of many countries ravaged due to world

war II

Representatives of large number of nations met in

Brettonwoods, New Hampshire, USA.

To discuss major economic problems including

reconstruction of economies

conference proposed setting up of IMF


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IMF

Is an organization of countries that seeks to

promote international monetary cooperation.

Facilitates the expansion of trade.

Thus, to contribute towards increased

employment and improved economic

conditions in all member countries.


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Purposes

Facilitate the expansion and balanced growth

of international trade.

Promote exchange stability and maintain

orderly exchange arrangement.

Correct balance of payment problems by

providing fund on temporary basis.


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Resources

Two resources of IMF

1.Quota 2. Borrowings


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Quota

Each country contributes fund, fixed in terms of

Quota.

Quotas are fixed on the following basis.

Two percent of national income.

5 percent of gold reserves.

10 percent of average annual imports.

10 percent of maximum variation in annual exports.


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Quota

Quotas of all the countries taken together

determine the major financial resources ofthe fund.

Each member nation of the IMF is requiredto subscribe its quota partly in gold and

partly in its own currency


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Member nation must contribute gold equal

to 25 percent of its quota.

Quotas are reviewed every five years and

adjusted from time to time by the fund.


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BORROWINGS

Secondary source of finance.

The fund may seek the amount it needs in

any currency and from any source, i,e. From

official entities as well as from privatesources.


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KEY IMF ACTIVITIES

The IMF supports its members by providing,

policy advice to governments and central banks

based on analysis of economic trends and cross-

country experiences;

research, statistics, forecasts, and analysis based ontracking of global, regional, and individual

economies and markets;


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assists all members--both industrial and

developing countries--that find themselves in

temporary balance of payments difficulties

by providing short- to medium-term credits.

loans to help countries overcome economic

difficulties;


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concessional loans to help fight poverty in

developing countries;

technical assistance

design and implement effective policies.manage their economic policy and financial

affairs


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ACHIEVEMENTS

1. The IMF has provided an excellent forum for thediscussion and solution of the economic, fiscal and

financial problem.

2. It has promoted the expansion of international

trade in variety of ways.

3. It has liberalized the use of its resources by

members in a number of ways.


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Achievements

It has accelerated the pace of economic

development of the under developed countries.

Fund has contributed in the expansion of world

trade.

The fund also served as an expert institution for

consultation and guidance in international monetary

matters.


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Conclusion

Has played important role in solving

international monetary problems.

Fund has remarkably succeeded in the

achievement of its main objectives.

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