IMF

Contents:

History of the IMF
What is the IMF?
Who is the MD of the IMF?
What is the full form of IMF?
What are the functions of the IMF?
How many countries are in the IMF?
What is the qualification for joining the IMF?
What are the benefits of IMF?
What are the objectives of the IMF?
What are the roles of the IMF?
How does voting Members are appointed in IMF?
Which type of operations are done in the IMF?
What are the Pros and Cons of IMF?

History of the IMF

IMF was established in 1944 as a result of the original layout of part of the Bretton Wood System exchange agreement, it was a primary idea of Harry Dexter White and John Maynard Keynes. It came into existence in the year 1945 with 29 member nations. The IMF staff consists of 150 nationalities and has 24 executive directors that represent 189 member countries with its headquarters in Washington D.C. English is the organization's official language. United Nations (UN) is its parent organization.

What is the International Monetary Fund?

The International Monetary Fund (IMF) is an international organization that promotes global economic growth and economic stability, promotes international trade and alleviates poverty.

Key Points

The IMF is an international agency that seeks to promote trade and improve the economic situation in poor countries.

The IMF assists its members with regard to the balance of payment issues with the supply of required credit.

The latest estimates from the IMF show that there is a disappointing estimate compared to those produced in April.

Who is the MD of the IMF?

Kristalina Georgieva is the (MD) managing director of the International Monetary Fund (IMF).

What is the full form of IMF?

IMF stands for International Monetary Fund

What are the functions of the IMF?

The main purpose of IMF is to ensure the stability of the international monetary system which is done in several ways i.e.

1. Exchange Stability:

The first essential task of the International Monetary Fund (IMF) is to maintain exchange stability and to discourage any fluctuations in the exchange rate. Such stability is found based on a 10 percent or more requirement by declaring the value of all members' currency in gold or the US dollar, applying the devaluation standard, finding more information, or the IMF. Guaranteed reliability. In order, members are prohibited from going to multiple exchange rates and buying or selling gold at prices other than the stated value.

2. Eliminating BOP Disequilibrium:

The fund helps member nation to eliminate or reduce the balance of short-term payments such as selling or lending foreign currencies to members. The fund helps its members to overcome long-term inequalities in the balance of payments. The Fund may advise its members to change the value of their currencies in the case of fundamental changes in the economy of its members.

3. Determination of Par Value:

The IMF implements a system of determining the par value of the currencies of the Member countries. According to the original articles of the IMF Agreement, each member state must declare its currency equivalent in gold or US dollars. According to the revised articles, members are given autonomy to change the float or exchange rates according to the level of the internal rate of demand in the exchange market.

According to this article, the IMF is using surveillance to ensure optimal performance and balance in the international currency system, that is, by adopting an interventionist approach to prevent exchange rate manipulation and to deal with short-term movements in the value of currency exchange.

4. Stabilize Economies:

An important task for the IMF is to advise the Member countries on various economic and monetary matters and thereby help to stabilize their economies.

5. Credit Facilities:

The IMF operates a variety of credit and credit facilities to assist the Member State to correct inequalities in its member's balance of payments. These loan facilities include basic credit facility, 3-year extended fund facility, indemnity financing facility, low stock facility, subsidiary financing facility, special oil facility, trust fund, and construction adjustment facility to assist primary producer countries. The fund also collects interest from its borrowing countries.

6. Maintaining Balance Between Supply and Demand of Currencies:

The IMF has been entrusted with the important task of maintaining a balance between demand and supply of various currencies. Accordingly, the Fund may declare a currency as a rare currency with high demand and increase its supply by borrowing from the respective country or buying the same currency instead of gold.

7. Maintenance of Liquidity:

The IMF has another important task to maintain its resource liquidity. Accordingly, there is a provision for member nations to borrow from the IMF (International Monetary Fund) by surrendering their currencies. In order to fund low-demand currencies, borrowing countries have been ordered to repay their loans in convertible currencies.

8. Technical Assistance:

The IMF is also doing a fruitful job of providing technical assistance to member nations. Such technical assistance is provided in two ways, namely, by sending their expert and expert services to the Member country first and secondly by outsourcing.

Also, the Fund has established two separate new divisions:

Central Banking Services Department and
Rendering the expertise of Member countries to the Department of Economic Affairs for the management and management of its central banks.

9. General Watch:

The IMF generally focuses on the monetary and fiscal policies adopted by the member countries to prevent the flow of charter provisions.

How many countries are in the IMF?

The IMF is a 189-nation organization that strives to promote global monetary cooperation, secure financial stability, and provide international convenience. Promote trade, high employment, and sustainable economic development and reduce poverty worldwide. The primary objective of the IMF is to ensure the stability of the international monetary system - exchange rates and international payment systems, which enable countries (and their citizens) to interact with one another.

The UN is a country of origin, not all UN member states belong to the IMF. Countries like Cuba, Monaco, and Andorra are UN members but don’t belong to the IMF. All members of the IMF belong to the IBRD (International Bank for Reconstruction and Development).

What is the qualification for joining the IMF?

Countries interested in joining the IMF (International Monetary Fund) are required to send membership applications that would be passed by the majority members of the organization. Upon joining, members would be assigned a loan based on their world economy. IMF also ensures that an interest rate of zero percent on loans is given to low-income countries or countries with struggling economies. It is also able to lend to its member countries a total amount of one trillion dollars. There are 36 leading arrangements.

What are the benefits of IMF?

IMF-related benefits are explicitly guaranteed to the 184 countries that have voluntarily joined the organization. Membership is expected to help these countries better manage their economies. Since Member nations know that they follow the IMF Code of Conduct, membership promotes investment and trade, leading to full employment. The International Monetary Fund (IMF) also provides technical assistance and financial assistance to the Member State when needed.

Access to information on the economic policies of all Member nations
Opportunity to affect members ’financial policies
Obtaining technical support in banking, financial matters and exchange matters
Financial assistance during payment difficulties
Opportunities for trade and investment have increased

What are the objectives of the IMF?

The original goal of the IMF was to avoid competitive devaluation and exchange controls that were characteristic of the 1930s. This has been done to maintain "fair practice codes" in the foreign exchange sector and to provide short-term loans to member countries that are experiencing a temporary deficit in the balance of payments so that they can afford to make these payments for depreciation. Finish. Or exchange controls, while at the same time adopting domestic policies and international policies to maintain high levels of employment.

Therefore, there are basically three general goals of the IMF:

the removal or absence of existing exchange controls;
the establishment and maintenance of currency convertibility with fixed exchange rates, and
Multilateral trade and broader expansion of payments.

What are the roles of the IMF?

The main functions of the IMF are:

It operates as a short-term loan company.
It provides machines to gradually adjust the exchange rates.
This is a repository of all member countries' currencies, from which the borrower can borrow the currency of other countries.
It is a foreign currency lending company. However, it only funds current transactions and not capital transactions.
It also sometimes provides machines to convert the value of a member's currency to its equivalent. In this way, it seeks to provide for a systematic adjustment of exchange rates, which improves the long-run equilibrium of member countries' payment conditions.
It also provides machinery for international consultation.

Properly, the fund contributes to the promotion and maintenance of high levels of employment and real income and the development of productive resources of all Member nations.

How does voting Members are appointed in IMF?

Voting members are appointed by the corporate members.

The voting power of the International Monetary Fund (IMF) is based on the quota system. Each member has the actual number of votes cast, which is 5.502% of the total votes and an additional vote for each Drawing Rights (SDR) of 100,000 in the member country's quota.

Which type of operations are done in the IMF?

The growth of IMF along with its global economy throughout its 70 years of operations has helped the organization retain its central role within the international financial architecture. Unlike the UN, where each country has one vote, the IMF was purposed to reflect the relative positions of its member countries in the global economy. It continues strategizing to ensure its administration structure adequately reflects crucial changes taking place in the world’s economy.

IMF is accountable and governed by its 189 member countries.

The policies in IMF (International Monetary Fund) are put in place to ensure that purposeful and accurate information is provided in real-time to its global audiences-in both the global economy and its member countries’ economies roles. IMF corporate giving is through the IMF Giving Together Campaign which is a guideline to its humanitarian and community outreach efforts.

What are the Pros and Cons of IMF?

Advantages of the IMF:-
The IMF helps member countries in various capacities.

Provides loans to Member Nations: Its most important function is the ability to lend to member countries in need of collateral. The IMF must comply with the terms of these loans, including the proposed economic policies, and the borrowing governments.
Fills Deficit Gaps: If a country has a pay deficit, the IMF (International Monetary Fund) can step in to fill the gap.
Technical support and Assistance: IMF (International Monetary Fund) serves as a council and advisor to countries attempting a new economic policy. IMF also publishes papers on new financial issues.

Disadvantages of IMF:-

Despite the lofty position and laudable goals, the IMF is trying to overcome an almost impossible economic achievement: making financial interventions purely over time and international. It faces criticism for the following:

Too much or too little intervention: The IMF (International Monetary Fund) has been criticized for not doing as much and as much as possible. It has been criticized for being too slow or too eager to resist national policies. Since the United States, Japan, and Great Britain are notorious for IMF policies, it has only been accused of being a tool for free-market countries. At the same time, free-market supporters have criticized the IMF for being too involved.
Makes a moral disaster: Some member nations, such as Italy and Greece, have been accused of chasing insecure budgets because they believe the IMF-led global community will come to their rescue. This is not in contrast to the moral hazard created by the bailout of the major banks.

People also search for SEBI, IATA, DRDO, HR, SKU, IRDA, etc.