International Monetary Fund
Download as PPTX, PDF1 like1,080 views
The IMF has played a role in shaping the global economy since World War II. It is an organization of 188 countries conceived at a 1944 UN conference to avoid competitive currency devaluations. The IMF's core responsibilities are to ensure monetary stability, secure exchange rates and payments systems, foster financial stability, and reduce poverty. It functions as a short-term lender of last resort providing currency reserves and advice to member countries.
International Monetary Fund
- 2. About IMF The IMF has played a part in shaping the global economy since the end of World War II. IMF is an organization on 188 countries. It is conceived in 1944 in UN Conference US. IMF came into being in 1945. The 44 countries developed a framework for economic co-operation. To avoid a repetition of the competitive devaluations. Its basic objective is to promote world economic stability and growth.
- 3. Responsibilities IMF is working to control global monetary cooperation. IMF Core responsibilities are To Ensure the stability of international monetary system To Ensure the stability in system of exchange rates and international payment for countries and citizens to do transactions. To foster secure financial stability, facilitate international trade, promote high employment and resuce poverty (Courtesy: imf.org)
- 4. Major functions of the IMF It functions as a short-term credit institution. Promoting orderly adjustment of exchange rates. It is a reservoir of the currencies of all the member countries from which a borrower nation can borrow the currency of other nations. It is a sort of lending institution in foreign exchange. However, it grants loans for financing current transactions only and not capital transactions. Advising member countries on economic, monetary and technical matters..
- 5. The IMF and Exchange Rates The IMF’s Articles of Agreement allow members to adopt the exchange rate regime of their choice. However, the IMF – taken to mean both management and shareholders – has a responsibility rigorously and candidly to assess the consistency of that regime with both country circumstances and the international system. The U.S. Treasury has made four proposals to strengthen IMF surveillance First, the membership of the IMF should clarify the principles of surveillance over exchange rate policies Second, Article IV reports must include more substantial and pointed discussions of exchange rate issues – on a consistent basis, but especially in systemically important countries. The IMF – with its wealth of expertise and experience across the globe – is well positioned to discuss exchange rate policies with authorities and advocate change. Third, such engagement is more effective with credible consequences, and that is the “Special Consultation” mechanism. Consultations would be a more useful tool if designed to enable more regular use. Finally, the IMF should develop its techniques for assessing exchange rate behavior and extend this work more to emerging markets
- 6. Resources IMF is a pool of central bank reserves and national currencies that are available to member countries under specified conditions. The capital of the IMF consists of the aggregate of the quotas allotted to the member countries member can pay its quota in its national currency. The IMF utilizes its gold holdings to acquire dollars and other currencies for its operations.
- 7. Operations: The IMF has shown great interest in the economic development of under development countries. It has made a steady progress towards the establishment of a multilateral system of payment in respect of current transactions. The IMF has promoted exchange rate stability and expansion of world trade. It has provided an excellent forum for the discussion and solution of economic, fiscal and financial problems having an international impact. The IMF has granted undue credit to some countries. Its insistence on devaluation in some cases proved ill advised. It has followed a week policy in the fixation of exchange rate. It has been charged as being partial to developed countries and not helping adequately the under developed countries.
- 8. THANK YOU!