Introduction, History, Objectives and Benefits of becoming the IMF member to India regarding IMF

1. INTERNATIONAL MONETARY FUND
Dr. Gopal Krishna Rathore
Associate Professor
Mandsaur University
gopalk1983@gmail.com

2. IMF Countries

3. Introduction
IMF, established in 1945, consists of 187 member countries. It works to
secure financial stability, develop global monetary cooperation, facilitate
international trade, and reduce poverty and maintain sustainable economic
growth around the world. Its headquarters are in Washington, D.C., United
States.
WTO and IMF have total 150 common members. Thus, they both work
together where the central focus of WTO is on the international trade and of
IMF is on the international monetary and financial system. These
organizations together ensure a sound system of global trade and financial
stability in the world.

4. Abbreviation IMF
Formation 27 December 1945; 73 years ago
Type International Financial Institution
Purpose
Promote international monetary co-operation, facilitate
international trade, foster sustainable economic growth,
make resources available to members experiencing
balance of payments difficulties[1]
Headquarters Washington, D.C. U.S.
Location Headquartered in Washington, D.C.
Region Worldwide
Membership 189 countries
Official language English
Managing Director Kristalina Georgieva
Main organ Board of Governors
Parent organization United Nations s
Staff 2,400
Website Imf.org

5. Rather than listing all 189 members, it's easier to list the
countries that are not members. The seven countries
(out of a total of 196 countries) that are not IMF
members are Cuba, East Timor, North Korea,
Liechtenstein, Monaco, Taiwan, and Vatican City. The IMF
has 11 members that are not sovereign
countries: Anguilla, Aruba, Barbados, Cabo Verde,
Curacao, Hong Kong, Macao, Montserrat, Netherlands
Antilles, Saint Maarten, and Timor-Leste.
Member countries of IMF

6. The IMF was originally laid out as a part of the Bretton Wood system
exchange agreement in 1944. During the Great Depression, countries
sharply raised barriers to trade in an attempt to improve their failing
economies. This led to the devaluation of national currencies and a
decline in world trade.
The Gold Room within the Mount Washinton Hotel where the Bretton Wood
Conference attendees signed the agreements creating the IMF and World Bank.
This breakdown in international monetary co-operation created a need
for oversight. The representatives of 45 governments met at the Bretton
Wood Conference in the Mount Washington Hotel in Bretton Woods
New Hampshire, in the United States, to discuss a framework for
postwar international economic co-operation and how to rebuild Europe
History of IMF

7. Objective of the IMF
Survey Global Conditions: The IMF has the rare ability to look into and
review the economies of all its member countries. As a result, it has its
finger on the pulse of the global economy better than any other
organization.
Advise Member Countries: Since the Mexican peso crisis of 1994–95 and
the Asian crisis of 1997–98, the IMF has taken a more active role to help
countries prevent financial crises. It develops standards that its members
should follow.
Provide Technical Assistance and Short-term Loans: The IMF provides
loans to help its members tackle balance of payments problems, stabilize
their economies, and restore sustainable growth. Because the Fund lends
money, it's often confused with the World Bank. The World Bank lends
money to developing countries for specific projects that will fight
poverty. Unlike the World Bank and other development agencies, the IMF
does not finance projects.

8. 1. Independence of the Indian Rupee:
Before the establishment of the IMF, the Indian rupee was linked with the British Pound Sterling. But Indian rupee has become
independent after the establishment of IMF. Its value is expressed in terms of gold. It is not determined by the Pound Sterling. It
means that Indian rupee is easily convertible into the currency of any other country.
2. Membership of the World Bank:
India has become a member of the World Bank also by virtue of its membership of the Fund. As a result, India got several loan
facilities from the World Bank for the development purposes.
3. Availability of Foreign Currencies:
The Government of India has been purchasing foreign currencies from the Fund from time to time to meet the requirements of
development activities. The large amount of availability of foreign currencies has greatly promoted the economic development of
the country.
4. Reputation in International Circle:
India is one of those six countries which have occupied a special place in the Board of Directors of the Fund. Thus, India had
played a creditable role in determining the policies of the Fund. This has increased India’s prestige in the international circles.
India takes keen interest in the formulation of Fund’s policies.
5. Guidance and Advice:
Being member of the Fund, India got the expert opinion from the Fund for solving its economic problems. The attitude of the
Fund towards India has always remained sympathetic. The Fund has given valuable advice to the Government of India with
regard to the financing of the Five-Year Plans.
Benefits of becoming the IMF member to India

9. 6. Timely Help:
India has received timely help from the Fund to eliminate the deficit on its balance of
payments. The Fund granted loans to meet the financial difficult is arising out of the
Indo-Pak conflict of 1965 and 1971. Thus, the fund has given timely help to solve
economic crisis.
7. Freedom from Sterling:
Indian rupee was convertible into other currencies through the medium of sterling before
becoming the member of the fund. With the fixation of paper value of the rupee in gold,
Indian currency is now freely convertible into any other currency.
8. Sale and Purchase of Foreign Exchange:
Fund has entrusted the sale and purchase of foreign exchange worth more than Rs. 2
lakh to Reserve Bank of India. The latter cannot enter into any transaction of foreign
exchange that is of the value of less than Rs. 2 lakh.
9. Economic Consultation:
In the financial management of Five- Year Plans, IMF has given valuable advice to
Government of India and to suggest measures for its economic development.
10. Help during Emergency:
India got a large amount of financial assistance from the Fund to solve its economic
crisis arising due to natural calamities like flood, earthquakes, famines etc.

10. Thanks