The International Monetary Fund, or IMF, promotes international financial stability and monetary cooperation. It also facilitates international trade, promotes employment and sustainable economic growth, and helps to reduce global poverty. The IMF is governed by and accountable to its 189 member countries
Founding and mission:
The IMF was conceived in July 1944 at the United Nations Bretton Woods Conference in New Hampshire, United States. The 44 countries in attendance sought to build a framework for international economic cooperation and avoid repeating the competitive currency devaluations that contributed to the Great Depression of the 1930s.
The IMF’s primary mission is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries and their citizens to transact with each other.
The IMF is accountable to its member country governments.
• promote international monetary co-operation,
• international trade,
• high employment,
• exchange-rate stability,
• sustainable economic growth, and
• making resources available to member countries in financial difficulty
• facilitate the expansion and balanced growth of International Trade
• establish a multilateral system of payments
These are the three major functions of IMF:-
The IMF provides advice on how to achieve economic stability, reduce vulnerability to economic and financial crises, and raise living standards.
The IMF provides financial support and works with governments to ensure responsible spending.
The IMF works with member countries & provides technical assistance and training to modernize there economic policies and institutions.
Purpose of IMF
• Promote international monetary cooperation
• Expansion and balanced growth of international trade
• Promote exchange rate stability
• The elimination of restrictions on the international flow of capital
• Make resources of the fund available to the members
• Help establish a multilateral system of payments and eliminate foreign exchange restrictions.
• Shorten the duration and lessen the degree of disequilibrium in international balances of payment.
• Foster economic growth and high levels of employment.
• Temporary financial assistance to countries to help the balance of payments adjustments
Success of IMF
International Monetary Cooperation
Reconstruction of European Countries
Multilateral System of Foreign Payments
Increase in International Liquidity
Increase in International Trade
Special Aid to Developing Countries
Providing Statistical Information
Helpful in Times of Difficulties
Easiness & Flexibility in Making International Payments
Failures of IMF
Lack of Stability in Exchange Rate
Lack of Stability in the Price of Gold
Inability to Remove Restrictions on Foreign Trade
Rich Nations Club
No help for development projects
No Solution of International Liquidity
Interference in Domestic Economies
Inability to tackle the Monetary Crisis of August 1971
Less Aid for Developing Countries
High Rate of Interest
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