Scribd
Upload
9 views10 pages

Overview of the International Monetary Fund

The International Monetary Fund (IMF) was created in 1944 at the Bretton Woods conference to prevent economic crises like the Great Depression. It officially began in 1945 with 29 member countries and now has 184 members. The IMF aims to promote international monetary cooperation, exchange stability, orderly exchange arrangements, economic growth, and employment. It provides temporary financial assistance to countries and promotes balanced trade. The five largest shareholders are the United States, Japan, Germany, France, and the United Kingdom. The IMF conducts surveillance of members' economies, provides financial assistance, and gives technical assistance in areas like fiscal policy and statistics.

Uploaded by

Pankaj Mishra
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
9 views10 pages

Overview of the International Monetary Fund

The International Monetary Fund (IMF) was created in 1944 at the Bretton Woods conference to prevent economic crises like the Great Depression. It officially began in 1945 with 29 member countries and now has 184 members. The IMF aims to promote international monetary cooperation, exchange stability, orderly exchange arrangements, economic growth, and employment. It provides temporary financial assistance to countries and promotes balanced trade. The five largest shareholders are the United States, Japan, Germany, France, and the United Kingdom. The IMF conducts surveillance of members' economies, provides financial assistance, and gives technical assistance in areas like fiscal policy and statistics.

Uploaded by

Pankaj Mishra
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

INTERNATIONAL MONETARY FUND

Prof. Mahima Mishra

The International Monetary Fund Created in 1944, at the Bretton Woods conference to prevent the kinds of chain reaction in the economic system that caused world currencies to collapse like in the Great Depression of the 1930s. Officially came into existence on 27 dec 1945 with 29 participating nations. Today,184 member Countries are there with Staff of about 2680 persons with its Headquarters in Washington, D.C.

PURPOSES :
Promote international monetary cooperation,exchange stability, and orderly exchange arrangements. Foster economic growth and high levels of Employment.

Temporary financial assistance to countries to help the balance of payments adjustments.


To promote exchange rate stability. To promote expansion & balanced growth of international trade.

Five largest shareholders:

United States, Japan, Germany, France, United Kingdom US enjoys largest quota of 17.07% in IMF(37.1b SDR). India has 1.91% share ( 4.158b SDR)

FUNCTIONS [Link] monitor the macroeconomic policies of member nations. [Link] assistance to tide over their BOP conditions [Link] assistance a) Strengthening their monetary and financial sectors b) Designing strong fiscal policies and management c) Budget formulation, expenditure management, and the management of internal and external debt d) Compiling, managing, and disseminating statistical data and improving data quality e)Drafting and reviewing economic and financial legislation f) Promoting sustained non-inflationary economic growth

The member nations pays 25% of their quotas in SDRs while the remaining amount in members own currency. Each member has 250 basic votes plus additional votes for each SDR 1,00,000. Quota also determines the amount of financial assistance a member nation can get. A member can borrow up to 100% of its quota annually. But it can be extended in exceptional cases.

LOANS FACILITIES BY IMF BUFFER STOCK FACILITY for financing Buffer Stock to member countries equivalent to 30% of its quota. EXTENDED FUND FACILITY to meet BOP difficulties for longer periods of 10 years or more . Members are allowed to get loan up to 100% of their quota. SUPPLEMENTARY FINANCING FACILITY special a/c was created to meet serious BOP problems which is larger in relation to their quota . STRUCTURAL ADJUSTMENT FACILITY under this , IMF gives loans to poor countries to carry out macroeconomic & structural adjustment programes. COMPENSATORY & CONTINGENCY FINANCING FACILITY to provide timely compensation for temporary short falls in cereal import cost.

SPECIAL DRAWING RIGHTS


The SDR was created by the IMF in 1969 as international supply of two key reserve assetsgold and the U.S. dollarproved inadequate for supporting the expansion of world trade and financial development that was taking place. Therefore, the international community decided to create a new international reserve asset under the auspices of the IMF. VALUE OF SDR The currency value of the SDR is determined by summing the values in U.S. dollars, based on market exchange rates, of a basket of major currencies the U.S. dollar, Euro, Japanese yen, Pound sterling. The SDR currency value is calculated daily (except on IMF holidays or whenever the IMF is closed for business) and the valuation basket is reviewed and adjusted every five years.

Members with Ten Largest Quotas

ALLOCATION OF SDRs
SDRs are allotted to member countries in proportion to their fund quota. Four large industrial countries- USA, UK, Japan, Canada have been allocated almost 45 % of total SDR. Once allocated, members can hold their SDRs as part of their international reserves or sell part or all of their SDR allocations. Members can exchange SDRs for freely usable currencies among themselves and with prescribed holders; such exchange can take place under a voluntary arrangement or under designation by the Fund.

You might also like