INTERNATIONAL

MONETARY FUND
Presented by: Suhana Jeelani khan.

IMF

Formation: 27 December 1945 (69 years

ago)
Headquarters: Washington D.C
Managing director: Christine Lagarde
Membership: 188 countries (to date)
Website: www.imf.org

What is IMF:
TheInternational Monetary Fund(IMF) is an
international organization headquartered in
Washington, D.C., in theUnited States, It is an
organization comprising of 188 countries
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. Formed in 1944 at
theBretton Woods Conference, it came into
formal existence in 1945 with 29 members.

History:

The IMF was originally laid out as a part of the

Bretton Woods systemexchange agreement in
1944.During theGreat Depression, countries sharply
raised barriers to trade in an attempt to improve their
failing economies. This led to thedevaluationof
national currencies and a decline in world trade.
This breakdown in international monetary co-operation
created a need for oversight. The representatives of 45
governments met at the Bretton Woods Conferencein
the Mount Washington Hotel in
Bretton Woods, New Hampshire, in the United States, to
discuss a framework for postwar international economic
cooperation and how to rebuild Europe.

he tiny Gold Room within the Mount Washington Hotelwhere

the Bretton Woods Conferenceattendees signed the
agreements creating the IMF andWorld Bank
T

Objectives

IMF seeks to achieve the following objectives:

(I) To promote international monetary cooperation.
(ii) To facilitate the expansion of international trade.
(iii) To ensure stability to foreign exchange rates.
(iv) To reduce disequilibrium in the international balance of payments of
member countries.
(v) To promote capital investment in backward and underdevelopment
countries.
(vi) To assist in the establishment of a multinational system of
payments in respect of current transactions between the member
countries.
(vii) To secure multilateral convertibility (i.e., to convert the currency of
any member into the currency of any other member).
(viii) To provide short term monetary help to members during
emergency.
(ix) To achieve balanced economic growth and high level of
employment in member countries.

Functions

Upon initial IMF formation, its two primary functions were: to oversee the
fixed exchange ratearrangements between countries, thus helping national
governments manage theirexchange ratesand allowing these governments
to prioritise economic growth, and to provide short-term capital to aid
balance of payments.This assistance was meant to prevent the spread of
internationaleconomic crises. The IMF was also intended to help mend the
pieces of the international economy postthe Great Depressionand
World War II.
The IMF's role was fundamentally altered after thefloating exchange rates
post 1971. It shifted to examining the economic policies of countries with
IMF loan agreements to determine if a shortage of capital was due to
economic fluctuationsor economic policy. The IMF also researched what
types of government policy would ensure economic recovery. The new
challenge is to promote and implement policy that reduces the frequency of
crises among the emerging market countries, especially the middle-income
countries that are vulnerable to massive capital outflows. Rather than
maintaining a position of oversight of only exchange rates, their function
became one of surveillance of the overall macroeconomic performance of
member countries. Their role became a lot more active because the IMF now
manages economic policy rather than just exchange rates.

Criticism.

Quota system
U.S influence
Borrower, creditor divide