Assignment

1. Assignment No. 08
Submitted By :- Rana Adeel
Submitted To:- Mam Rafia qazmi
Roll No. BBA-21-21
Topic:- International Monetary Fund
Subject :- International Business
University of sahiwal.
International Monetary Fund (IMF)

2.  Introduction
The International Monetary Fund (IMF) is a major financial agency of
the United Nations, and an international financial institution funded by
190 member countries, with headquarters in Washington, D.C. It is
regarded as the global lender of last resort to national governments,
and a leading supporter of exchange-rate stability. Its stated mission is
"working to foster global monetary cooperation, secure financial
stability, facilitate international trade, promote high employment and
sustainable economic growth, and reduce poverty around the world."
Established on December 27, 1945 at the Bretton Woods Conference,
primarily according to the ideas of Harry Dexter White and John
Maynard Keynes, it started with 29 member countries and the goal of
reconstructing the international monetary system after World War II.
It now plays a central role in the management of balance of payments
difficulties and international financial crises. Through a quota system,
countries contribute funds to a pool from which countries can borrow if
they experience balance of payments problems. The IMF works to
stabilize and foster the economies of its member countries by its use
of the fund, as well as other activities such as gathering and analyzing
economic statistics and surveillance of its members' economies. IMF
funds come from two major sources: quotas and loans. Quotas, which
are pooled funds from member nations, generate most IMF funds. The
size of members' quotas increase according to their economic and
financial importance in the world. The quotas are increased periodically
as a means of boosting the IMF's resources in the form of special
drawing rights.
The current managing director (MD) and chairwoman of the IMF is
Bulgarian economist Kristalina Georgieva, who has held the post since
October 1, 2019
 History

3. International Monetary Fund (IMF), United Nations (UN) specialized
agency, founded at the Bretton Woods Conference in 1944 to secure
international monetary cooperation, to stabilize currency exchange
rates, and to expand international liquidity (access to hard currencies).
The International Monetary Fund (IMF) was established in 1944 during
the Bretton Woods Conference in New Hampshire, USA, alongside the
World Bank. It was created to promote international monetary
cooperation, exchange rate stability, and balanced growth of
international trade. The IMF's main objectives include facilitating the
expansion and balanced growth of international trade, promoting
exchange rate stability, assisting in the establishment of a multilateral
system of payments, and lending resources to member countries
experiencing balance of payments problems. Throughout its history,
the IMF has played a significant role in stabilizing economies during
financial crises, providing financial assistance to member countries
facing balance of payments problems, and offering policy advice and
technical assistance to help countries build strong economic
foundations. The IMF has also undergone reforms over the years to
adapt to changing global economic conditions and to better fulfill its
mandate.
Key moments in IMF history include the collapse of the Bretton Woods
system in the early 1970s, the debt crises of the 1980s, the Asian
financial crisis in the late 1990s, and the global financial crisis of 2007-
2008. Each of these events prompted the IMF to reassess its policies
and operations, leading to reforms aimed at enhancing its
effectiveness in responding to economic challenges.
In recent years, the IMF has focused on issues such as financial
stability, debt sustainability, poverty reduction, and inclusive growth. It
continues to provide financial assistance, policy advice, and technical
assistance to its member countries while also working to promote
global economic stability and prosperity.
 Objectives

4. 1. Promoting international monetary cooperation: The IMF aims to
facilitate collaboration among countries to maintain stability in the
international monetary system, which includes exchange rate stability
and orderly exchange arrangements.
2. Facilitating the expansion and balanced growth of international
trade: By providing member countries with financial assistance and
policy advice, the IMF helps promote sustainable economic growth and
development, which in turn supports global trade.
3. Promoting exchange rate stability: The IMF works to prevent
disruptive fluctuations in exchange rates that can hinder international
trade and investment by providing member countries with guidance on
exchange rate policies and interventions.
4. Assisting in the establishment of a multilateral system of
payments: The IMF supports the development of a system for making
international payments that is efficient, transparent, and accessible to
all countries, which helps facilitate global economic transactions.
5. Lending resources to member countries facing balance of
payments problems: One of the IMF's primary functions is to provide
financial assistance to member countries experiencing difficulties in
meeting their external financial obligations, helping them stabilize their
economies and restore sustainable growth.
 Function
1. Surveillance: The IMF monitors the global economy and individual
member countries' economies through regular economic
assessments and analysis. This surveillance helps identify
emerging risks, vulnerabilities, and policy challenges, allowing the
IMF to provide timely policy advice to member countries.
2. Financial assistance: The IMF provides financial assistance to
member countries facing balance of payments problems, which
occur when a country's external financial obligations exceed its
available foreign exchange reserves. This assistance comes in the
form of loans and credit lines tailored to the specific needs of each
country, helping them stabilize their economies and implement
necessary reforms.
3. Technical assistance and capacity building: The IMF offers
technical assistance and training to help member countries

5. strengthen their economic institutions, policies, and systems. This
support aims to enhance countries' capacity to design and
implement effective macroeconomic policies, improve financial
regulation and supervision, and build statistical capacity.
4. Policy advice: Drawing on its expertise and analysis, the IMF
provides policy advice to member countries on a wide range of
economic and financial issues, including fiscal policy, monetary
policy, exchange rate policy, structural reforms, and financial sector
policies. This advice is tailored to the specific circumstances and
challenges faced by each country.
5. Research and analysis: The IMF conducts research and analysis
on various aspects of the global economy, including
macroeconomic trends, financial stability, international trade, and
development issues. This research informs the IMF's policy advice,
enhances its understanding of economic challenges and policy
responses, and contributes to the global policy dialogue on
economic issues.
 Advantages:
1. Financial Assistance: Provides financial support to member countries facing balance of
payments problems.
2. Stabilizes Economies: Helps stabilize economies through policy advice and technical
assistance.
3. Crisis Prevention: Works to prevent financial crises through surveillance and early
warning systems.
4. Global Coordination: Facilitates global economic coordination and cooperation among
member countries.
 Disadvantages:
1. Conditionality: IMF loans often come with strict conditions, such as austerity measures,
which can be politically and socially difficult to implement.
2. Criticism of Policy Advice: Some argue that IMF policy advice may not always be
tailored to the specific needs and circumstances of member countries.
3. Democratic Deficit: Decision-making within the IMF is dominated by advanced
economies, leading to criticisms of a lack of representation for developing countries
4. Social Impact: IMF programs have been associated with negative social impacts, such as
increased inequality and poverty due to austerity measures.