International monetary Fund
IMF was formed in 1944 at the Bretton Woods Conference
• It came into formal existence in 1945 with 29 member countries
• Currently the International Monetary Fund (IMF) is an organization of 189 countries
• It works to foster global growth and economic stability by providing policy, advice and financing the
members, by working with developing nations to help them achieve macroeconomic stability and
reduce poverty.
Explanation of IMF
voting power of each member country is based on a quota system, with each member having a
specific number of basic votes that represents 5.502% of the total votes
• Further, there is one additional vote for each Special Drawing Right (SDR) of 100, 000 out of a
member’s quota
• The SDR represents a claim of currency, and it is the unit of account of the International Monetary Fund
• It is based on a basket of key international currencies
• Any changes to the voting power of member countries require approval by over 85% of the voting power.
The IMF’s primary purpose is to ensure the stability of the international monetary system—the system
of exchange rates and international payments that enables countries (and their citizens) to transact with
each other
• It does so in three ways:
➢ keeping track of the global economy and the economies of member countries
➢ lending to countries with balance of payments difficulties
➢ giving practical help to members
Activities under the mandate of IMF :
1. Economic Surveillance
The IMF oversees the international monetary system and monitors the economic and financial policies of its 189 member countries. As part of this process, which takes place both at the global level and in individual countries, the IMF highlights possible risks to stability and advises on needed policy adjustments.
2. Lending
The IMF provides loans to member countries experiencing actual or potential balance of payments problems to help themrebuild their international reserves, stabilize their currencies, continue paying for imports, and restore conditions for strong economic growth, while correcting underlying problems.
3. Capacity Development
The IMF works with governments around the world to modernize their economic policies and institutions, and train their people. This helps countries strengthen their economy, improve growth and create jobs.
Explanation of IMF
International Monetary Fund (IMF) Managing Director Christine Lagarde has appointed Gita Gopinath as EconomicCounsellor and Director of the IMF’s Research Department on October 1st 2018
• Ms. Gopinath will succeed Maurice (Maury) Obstfeld, who announced in July that he would retire at the end of 2018
• Ms. Gopinath is co-editor of the American Economic Review and co-director of the International Finance andMacroeconomics Program at the National Bureau of Economic Research (NBER)
• She is co-editor of the current Handbook of International Economics with Former IMF Economic Counsellor Kenneth Rogoff
• She has authored some 40 research articles on exchange rates, trade and investment, international financial crises,monetary policy, debt, and emerging market crises.
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