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n er na onamonetar y fundonetar y fund(IMF)IMF)

Uni. Ref Book Page nos Uni. Ref Book Page nos 123/136(M3)123/136(M3)


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IMFMF International monetary institutionInternational monetary institution

established by different countries afterestablished by different countries afterWorld War II.World War II.

WW prices. Profits, share prices,WW prices. Profits, share prices,

production, employment, income ofproduction, employment, income ofleading countries fell very low.leading countries fell very low.

affected the economies of the world.affected the economies of the world. World wide depressionWorld wide depression Therefore, the monetary authorities ofTherefore, the monetary authorities of

the world felt the need for internationalthe world felt the need for internationalco-operation to establish internationalco-operation to establish internationalmonetary stability.monetary stability.


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IMFMF A conference of 44 majorA conference of 44 major

countries was held at Brettoncountries was held at BrettonWoods in July 1944 . The resultWoods in July 1944 . The result

was the establishment of IMF andwas the establishment of IMF andInternational Bank forInternational Bank forReconstruction and DevelopmentReconstruction and Development(IBRD)(IBRD)

These two institutions are calledThese two institutions are calledBretton Woods TwinsBretton Woods Twins


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IMFMF Came to existence in December 1945Came to existence in December 1945

and started functioning in March 1947.and started functioning in March 1947. Autonomous institution affiliated toAutonomous institution affiliated to

UNO and functioning from Washington.UNO and functioning from Washington. Started with 30 countries and theStarted with 30 countries and the

current strength is more than 150.current strength is more than 150. The resources of the IMF areThe resources of the IMF are

subscribed by the members andsubscribed by the members andsubscription quota of each member issubscription quota of each member isbased on its national incomebased on its national income


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OBJ ECTI VESBJ ECTI VES To solve international monetary problems.To solve international monetary problems. Balanced growth of international tradeBalanced growth of international trade Employment growth and income growthEmployment growth and income growth Development of productive resources odf allDevelopment of productive resources odf all

member countriesmember countries To promote exchange stabilityTo promote exchange stability To give confidence to members thatTo give confidence to members that

resources are available to themresources are available to them Lesson the degree of disequilibrium inLesson the degree of disequilibrium in

International balance of payments.International balance of payments.


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FUN CTI ON SUN CTI ON S It acts as a short term credit institutionIt acts as a short term credit institution Orderly adjustments of exchange rateOrderly adjustments of exchange rate It is a reservoir of currencies of allIt is a reservoir of currencies of all

member nations, who can borrow themember nations, who can borrow thecurrency of other nationscurrency of other nations

It grants loans only for financingIt grants loans only for financingcurrent transactions and not capitalcurrent transactions and not capitaltransactionstransactions

Provides machinery for internationalProvides machinery for internationalconsultationconsultation


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Org aniza tio n of I MFrg aniza tio n of I MF Management of the fund is underManagement of the fund is under

the control of two bodies.the control of two bodies.

(b)(b)

Board of GovernorsBoard of Governors

(c)(c) Board of Executive DirectorsBoard of Executive Directors


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Org aniza tio n of I MFrg aniza tio n of I MF The board of GovernorsThe board of Governors has the responsibilityhas the responsibility

of formulating the general policies of the fundof formulating the general policies of the fund Consists of one Governor and an alternateConsists of one Governor and an alternate

Governor from each member country.Governor from each member country.

The board of executive directorsThe board of executive directors controls thecontrols theday to day activities of the fund. It consists ofday to day activities of the fund. It consists of22 directors, 6 of these are appointed by the22 directors, 6 of these are appointed by themembers having the largest quotas, namelymembers having the largest quotas, namelyUS, UK, West Germany, France, Japan andUS, UK, West Germany, France, Japan andSaudi Arabia.Saudi Arabia.


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AchievementsAchievements

Provision of credit beneficialProvision of credit beneficial

for developing countriesfor developing countries

Exchange stabilityExchange stability Expansion of world tradeExpansion of world trade

Machinery for consultationMachinery for consultation

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