2. INTRODUCTION
IMF is a forum of national economic policies,
international monetary and financial systems,
Which involves active dialogue with each
member Country.
When there is a country where has a serious
finance problem, other countries loan the money
for the poor country.
IMF is a kind of association among the countries
to prepare the situation when the nation bank of
country is bankrupted.
IMF is an administrative unit that is international
in nature and whose objective is to regulate and
administer the financial system of the world.
3. ABOUT IMF
• IMF headquarters is in Washington D.C , U.S.A
• Five largest shareholders are United States, Japan, Germany,
France, United Kingdom.
• China, Russia, and Saudi Arabia have their own seats on the
Board.
• 16 other Executive Directors are elected for two year terms by
groups of countries, known as “Constituencies”.
• The International Monetary Fund (IMF) is an organization of
188 countries
4. HISTORY OF IMF
• The International Monetary Fund Was 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.
• Bretton wood agreement was contracted in 1944 and
• IMF was created in 1946.
• IMF started to make service with IBRD (international bank of
reconstruction and development) in 1947.
• The IMF was created to support orderly international currency
exchanges and to help nations having balance of payment
problems through short term loans of cash.
5. GROWTH IN IMF MEMBERSHIP
• In the beginning 29 member countries
• Today, 187 member countries.
• Staff of about 2800 persons.
• Two-thirds are economists in 139 countries.
• Headquarters in Washington, D.C.
6. PURPOSES OF IMF
• IMF promote international monetary cooperation .
• Expansion and balanced growth of international trade.
• IMF promote exchange rate stability .
• Help establish multilateral system of payments and eliminate
foreign exchange restrictions.
• IMF make resources of the Fund available to members.
• Foster economic growth and high levels of employment.
• IMF can make the price of foreign money to be safe.
• IMF can solve the problem of countries that doesn’t want to
allow the
• Foreign money to make their currency’s value higher.
7. MEMBERSHIP AND GOVERNANCE
• Managing Director: Christine Madeleine (since 5 July 2011)
• Executive Board (24 Members)
• Weighted Voting System:
– US Representative holds 17% of total Voting Power
– 27 Countries together hold 1.4% of total Voting Power
– Each member country's quota broadly reflects the size of
its economy
• Board of Governors: one governor from each member
country. Meets once a year.
• Day to day affairs are guided by the Executive Board & 24
Executive Directors. Managing Director of IMF is Chairman of
Executive Board.
8. WHERE THE IMF GETS ITS MONEY
Most comes from the quota subscriptions
– the money each member contributes when
joining the IMF
– Quotas also determine how much each
member can borrow from the IMF when in
need of aid
General Arrangements to Borrow (1962)
– line of credit set up with several
governments and banks throughout the
world
9. SPECIAL DRAWING RIGHT (SDRS)
• SDR is an invented currency
– its value is based on the worth of the
world’s five major currencies
dollars, euros, pounds sterling, or Japanese
yen.
Countries pay 25 percent of their quota
subscriptions in SDRs.
They pay the remaining 75 percent in their
own currencies
10. OBJECTIBES OF IMF
To promote international monetary cooperation through a permanent
institution which provides the machinery for consolation and
collaboration on international monetary problems.
To facilitate the expansion and balanced growth of international trade,
and to contribute thereby to the promotion and maintenance of high
levels of employment and real income and to the development of the
productive resources of all members as primary objective of economic
policy.
To promote exchange stability, to maintain orderly exchange
arrangements among members, and to avoid competitive exchange
depreciation.
To assist in the establishment of a multilateral system of payments in
respect of current transactions between members and in the
elimination of foreign exchange restrictions which hamper the growth
of world trade.
11. CONT…
To give confidence to members by making the general resources of the
Fund temporarily available to them under adequate safeguards, thus
providing them with the opportunity to correct maladjustments in their
balance of payments, without resor ting to measures destructive of
national or international prosperity.
In accordance with the above, to shorten the duration and lessen the
degree of dis -equilibrium in the international balance of payments of
members.
12. SESSIONS:
ANNUAL MEETINGS
SPRING MEETINGS
International Monetary and Financial Committee
(IMFC) Meetings
Executive Board Meetings
Committee on the IMF's Financial Structure and
Policies
13. ROLE OF IMF
• Focusing on its core macroeconomic and financial areas of
responsibility.
• Working in a complementary fashion with other institutions
established.
• Collection and allocation of reserves.
• Rendering advice to member countries on their international
monetary affairs.
• Promoting research in various areas of international
economics and monetary economics.
• Providing a forum for discussion and consultation among
member countries.
• Being in the center of competence.
14. FUNCTIONS OF IMF
• Surveillance (like a doctor)
Gathering data and assessing economic policies of
countries.
• Technical Assistance (like a teacher)
Strengthening human skills and institutional capacity of
countries.
• Financial Assistance (like a banker)
Lending to countries to support reforms
15. ROLE
Successes of the IMF:
Crisis Management and
Stabilization
Promoting
Macroeconomic Stability
Capacity Building and
Technical Assistance
Surveillance and Early
Warning
Failures of the IMF:
One-length-fits-all
Approach
Social and Economic
Consequences
Conditionality and
Ownership
Inadequate Response to
Global Economic
Challenges
16. CRITICISM:
Conditionality and Austerity Measures
One-Size-Fits-All Approach
Democratic Deficit and Lack of Accountability
Transparency and Public Participation
Neoliberal Policy Bias
Role in Economic Crises
