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Bachelor of Business Administration-BBA Semester 6
BB0030 – Role of International Finance Institutions- 2 Credits
(Book ID: B0172)
Assignment Set- 1 (30 Marks)
Note: Each question carries 10 Marks. Answer all the questions.
Q1. Explain briefly the methods by which the IMF lends funds to member countries.
The International Monetary Fund (IMF) is an international organization that oversees the global
financial system by following the macroeconomic policies of its member countries; in particular
those with an impact on exchange rates and the balance of payments. It is an organization formed
to stabilize international exchange rates and facilitate development.
The Buffer Stock Financing Facility (BSFF) –
The Buffer Stock Financing Facility (BSFF) was established in 1969 to provide assistance to
members in connection with their contributions to international buffer stocks of primary products,
operating in the context of approved international commodity agreements (ICAs). The BSFF was
the Fund's contribution to the international community's efforts to stabilize commodity prices,
which were seen at the time as excessively volatile,
Q2. Write a brief note on the lending operations of IBRD. How are they different than the
IMF.

2. Ans- IBRD LENDING OPERATIONS
Fund Generation
IBRD lending to developing countries is primarily financed by selling AAA-rated bonds in the
world's financial markets. While IBRD earns a small margin on this lending, the greater proportion
of its income comes from lending out its own capital. This capital consists of reserves built up over
the years and money paid in from the Bank's 185 member country shareholders. IBRD’s income
also pays for World Bank operating expenses and has contributed to IDA and debt relief.
Loans
Q3. In the current scenario, examine the relevance of the above two institutions.
The International Monetary Fund (IMF)
The IMF is an international organization of 184 member countries. It was established to promote
international monetary cooperation, exchange stability, and orderly exchange arrangements; to
foster economic growth and high levels of employment; and to provide temporary financial
assistance to countries to help ease balance of payments adjustment.
Since the IMF was established its purposes have remained unchanged but its operations—which
involve surveillance, financial assistance, and technical assistance—have developed to meet the
changing needs of its member countries in an evolving world economy.
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