The International Monetary Fund (IMF) was created in 1945 to help and
promote the health of the world economy. Its Headquarter in Washington DC .It
is governed by and accountable to the governments of the countries that make up
its near-global membership.
The International Monetary Fund also
known as the “IMF” was conceived at a United Nations conference convened in
Bretton Woods, New Hampshire, U.S. in July 1944. The 45 governments represented
at that conference sought to build a framework for economic cooperation that
would avoid a repetition of the disastrous economic policies that had
contributed to the Great Depression of the 1930s.
Presently there are memberships of 184 countries over the
world and a staff of approximately 2,680 from 139 countries. Total Quotas to
the extent of $312 billion (as of 8/31/05). Loans outstanding $71 billion to 82
countries, of which $10 billion to 59 on concessional terms (as of 8/31/05) and
technical Assistance provided 381 person years during FY2005.Surveillance
consultations concluded 129 countries during FY2005, of which 118 voluntarily
published information on their consultation.
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Responsibilities of IMF:-
Article 1 sets out main responsibilities of IMF which are as
follows,
1) Promoting
international monetary cooperation.
2) Facilitating the expansion and balanced growth of
international trade.
3) Promoting exchange stability.
4) Assisting in the establishment of a multilateral system
of payments and
5) Making its resources available (under adequate
safeguards) to members experiencing balance of payments difficulties.
Generally, the IMF is responsible for ensuring the stability
of the international monetary and financial system—the system of international
payments and exchange rates among national currencies that enables trade to
take place between countries. The Fund seeks to promote economic stability and
prevent crises; to help resolve crises when they do occur; and to promote
growth and alleviate poverty. It employs three main functions—surveillance,
technical assistance, and lending—to meet these objectives.
HIGH
LIGHTS OF IMF ACTIVITIES: -
* The IMF works to promote global growth and
economic stability and there by
prevent economic crisis—by encouraging countries to adopt sound economic
policies.
Act of
being vigilant is the regular dialogue and policy advice that the IMF offers to
each of its members. Generally once a year, the Fund conducts in-depth
appraisals of each member country's economic situation. It discusses with the
country's authorities the policies that are most conducive to stable exchange
rates and a growing and prosperous economy. Members have the option to publish
the Fund's assessment, and the overwhelming majority of countries opt for transparency,
making extensive information on bilateral surveillance available to the public.
The IMF also combines information from individual consultations to form
assessments of global and regional developments and prospects. These views on
the IMF's multilateral surveillance are published twice each year in the world
economic outlook and the global financial stability report.
Technical
assistance and training are offered—mostly free of charge—to help member
countries strengthen their capacity to design and implement effective policies.
Technical assistance is offered in several areas, including fiscal policy,
monetary and exchange rate policies, banking and financial system supervision
and regulation, and statistics.
* In
the event that member countries do experience difficulties financing their balance of payments, the IMF is also a
fund that can be tapped to help in recovery.
Financial stability
is available to give member countries the breathing room they need to correct
balance of payments problems. A policy program supported by IMF financing is
designed by the national authorities in close cooperation with the IMF, and
continued financial support is conditional on effective implementation of this
program.
*The IMF is also actively working to reduce poverty in countries around the globe,
independently and in collaboration with the World Bank and other organizations.
The IMF
provides financial support through its concessional lending facility—the
poverty reduction and growth facility (PRGF) —and through debt relief under the
Heavily indebted poor countries (HIPC).
In most
low-income countries, this support is underpinned by poverty reduction strategy
papers (PRSP). These papers are prepared by country authorities—in consultation
with civil society and external development partners—to describe a
comprehensive economic, structural and social policy framework that is being
implemented to promote growth and reduce poverty in the country.
IMF Governance and Organization: -
The IMF is accountable to the governments of its member
countries. At the apex of its organizational structure is its Board of
Governors, which consists of one Governor from each of the IMF's 184 member
countries. All Governors meet once each year at the IMF-World Bank Annual Meetings;
24 of the Governors sit on the International Monetary and Finance Committee
(IMFC) and meet twice each year. The day-to-day work of the IMF is conducted at
its Washington DC headquarters by its 24-member Executive Body; this work is
guided by the IMFC and supported by the IMF's professional staff. The Managing
Director is Head of IMF Staff and Chairman of the Executive Board, and is
assisted by three Deputy Managing Directors.
The IMF's resources are provided by its member countries,
primarily through payment of quotas, which broadly reflect each country's
economic size. The total amount of quotas are the most important factors
determining the IMF's lending capacity. The annual expenses of running the Fund
are met mainly by the difference between interest receipts (on outstanding
loans) and interest payments (on quota “deposits).