International Monetary Fund (IMF)
The International Monetary Fund (IMF) was conceived at a United Nations conference convened in Bretton Woods, New Hampshire, United States, in July 1944. The 44 governments represented at that conference sought to build a framework for economic cooperation that would avoid a repetition of the vicious circle of competitive devaluations that had contributed to the Great Depression of the 1930s.
International Monetary Fund (IMF) works to foster international monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. Created in 1945, the IMF is governed by and accountable to the 188 countries that make up its near-global membership.
IMF Fact File
The IMFï¿½s primary purpose is to ensure the stability of the international monetary systemï¿½the system of exchange rates and international payments that enables countries (and their citizens) to transact with one other. This system is essential for promoting sustainable economic growth, increasing living standards, and reducing poverty. The Fundï¿½s mandate has recently been clarified and updated to cover the full range of macroeconomic and a financial sector issues that bear on global stability.
- Membership: 188 countries
- Headquarters: Washington, D.C.
- Executive Board: 24 Directors representing countries or groups of countries
- Staff: Approximately 2,503 from 144 countries
- Total quotas: US$360 billion (as of 3/14/13)
- Additional pledged or committed resources: US$1 trillion
- Loans committed (as on 3/7/13): US$226 billion, of which US$166 billion have not been drawn.
- Biggest borrowers (amount agreed as of 3/7/13): Greece, Portugal, Ireland
- Biggest precautionary loans (amount agreed as of 3/7/13): Mexico, Poland, Colombia
- Surveillance consultations: In 2011, 122 consultations were discussed and in 2012, 123 consultations were discussed
- Technical assistance: Field delivery in FY2012ï¿½246 person years
- Transparency: In 2012, about 91 per cent of Article IV and program-related starebports and policy papers were published (as of 3/20/2013)
- Article 1 of the Articles of Agreement sets out IMFï¿½s main goals:
- Promoting international monetary cooperation;
- Facilitating the expansion and balanced growth of international trade;
- Promoting exchange stability;
- Assisting in the establishment of a multilateral system of payments; and
- Making resources available (with adequate safeguards) to members experiencing balance of payments difficulties.
To maintain stability and prevent crises in the international monetary system, the IMF reviews country policies, as well as national, regional, and global economic and financial developments through a formal system known as surveillance. Under the surveillance framework, the IMF provides advice to its 188 member countries, encouraging policies that foster economic stability, reduce vulnerability to economic and financial crises, and raise living standards.
IMF financing provides member countries the breathing room they need to correct balance of payments problems. A policy program supported by IMF financing is designed by the national authorities in close cooperation with the IMF, and continued financial support is conditioned on effective implementation of this program. In an early response to the recent global economic crisis, the IMF strengthened its lending capacity and approved a major overhaul of the mechanisms for providing n financial support in April 2009, with further reforms adopted in August 2010 and December 2011.
In the most recent reforms, IMF lending instruments were improved further to provide flexible crisis prevention tools to a broad range of members with sound fundamentals, policies, and institutional policy frameworks. In low-income countries, the IMF doubled loan access limits and is boosting its lending to the worldï¿½s poorer countries, supported by the windfall profits from gold sales, with interest rates set at zero through end-2014.
The IMF issues an international reserve asset known as Special Drawing Rights (SDRs) that can supplement the social reserves of member countries. Two allocations in August and September 2009 increased the outstanding stock of SDRs almost ten-fold to total about SDR 204 billion (US$310 billion). Members can also voluntarily exchange SDRs for currencies among themselves. In a 2011 paper, IMF staff explored options to enhance the role of the SDR to promote stability of the international monetary system.
The IMFï¿½s resources are provided by its member countries, primarily through payment of quotas, which broadly reflect each countryï¿½s economic size. At the April 2009 G-20 Summit, world leaders pledged to support a tripling of the IMFï¿½s lending resources from about US$250 billion to US$750 billion. To deliver on this pledge, the then current and new participants in the New Arrangements to Borrow (NAB) agreed to expand the NAB to about US$570 billion, which became effective on March 11, 2011 following completion of the ratification process by NAB participants. When concluding the 14th General Review of Quotas in December 2010, Governors agreed to double the IMFï¿½s quota resources to approximately US$730 billion and a major realignment of quota shares among members. When the quota increase becomes effective, there will be a corresponding rollback in NAB resources. In mid-2012, member countries announced additional pledges to increase the IMFï¿½s resources by $460 billion to help strengthen global economic and financial stability. Historically, the annual expenses of running the Fund have been met mainly by interest receipts on outstanding loans, but the membership agreed in 2012 to adopt a new income model based on a range of revenue sources better suited to the diverse activities of the Fund.
Governance and organisation
The IMF is accountable to the governments of its member countries. At the top of its organisational structure is the Board of Governors, which consists of one Governor and one Alternate Governor from each member country. The Board of Governors meets once each year at the IMF-World Bank Annual Meetings. Twenty-four of the Governors sit on the International Monetary and Financial Committee (IMFC) and normally meet twice each year day-to-day work of the IMF is overseen by its 24-member Executive Board, which represents the entire membership; this work is guided by the IMFC and supported by the IMF staff. In a package of reforms approved by the Governors in December 2010, the Articles of Agreement will be amended so as to facilitate a move to a more representative, all-elected Executive Board. e Managing Director i s the head of the IMF staff and Chairman of the Executive Board, and is assisted by four Deputy Managing Directors.
Written by princy