What Are The Main Functions Of International Monetary Fund (IMF?)


9 Answers

Qurrat ul ain Hassan Profile
International Monetary Fund or IMF is a finance monitoring organization formed on December 1945.Primary purpose of IMF is to develop policies regarding money monitoring, uniform standards for currency exchange and stable payment systems that should be mutually accepted by all the member countries of IMF. At present number of registered countries with IMF are 182, operations in 110 countries with 2600 employees.

Functions of IMF are to develop fair and monitor currency exchange rates among all the countries. IMF also provides short tem loans to its member countries so they could bring their imbalanced payment system into balance. One more important function of IMF is to draw lending money model for borrower countries. In this way IMF also acts as Debtor.

IMF also provides Training and Technical assistance in the areas of finance management system, Tax system, banking system development to its member countries through its Monetary and Exchange Affairs Department, the Fiscal Affairs Department, and the Bureau of Statistics. The Legal Department, the Bureau of Computing Services, and the area departments also coordinate. IMF also helps to draw a systematic system for foreign transactions to take place. It provides advice on microeconomic development.

Every member of IMF provides a fixed quota of money to IMF. Size of amount is based on the ability of government to pay.
Sajid Majeed Profile
Sajid Majeed answered
IMF main function is to purchase and sell the member countries currencies.
If any country is facing adverse balance of payment and facing the difficulty to get the currency of creditor country, it can get short term credit from the fund to clear the debit.
The IMF allows the debtor country to purchase foreign currency in exchange for its own currency up to 75% of its quota plus an addition 25% each year. The maximum limit of the quota is 200% in special circumstances.

If the demand of any particular country currency increases and its stock with the fund falls below 75% of its quota, the IMF can declare it scare. But IMF also tries to increase its supply by these methods.

IMF purchases the Scare currency by gold.
IMF borrows from those countries scare currency that has surplus amount.
IIMF allows the debtor countries to impose restrictions on the imports of creditor country.
IMF is very useful to avoid the competitive depreciation which took place before World war-II.

When the devaluation policy is indispensable for any country then IMF provides loan to correct the balance of payment of that country. These are the main functions of International Monetary Fund.
Anonymous Profile
Anonymous answered
I think 'Ady123' has confused the International Monetary Fund with the World Bank. While the IMF does offer highly leveraged loans to struggling economies, this has two purposes (neither of which are 'helping developing countries'):
  1: Allowing that country to stabilise their exchange rate through macroeconomic policy (such as they did during the 1997 Asian Financial Crisis)
  2: Allowing that country to finance balance of payments problems.

  The IMFs objectives are ensuring the stability of the global financial system and fostering financial cooperation between countries
Anonymous Profile
Anonymous answered
Help members countries to overcome their balance of payment problems
Anonymous Profile
Anonymous answered
These include;
.Surveillance over member's economic policies
.financing temporary balance of payment needs
.combating poverty in low income countries
.increasing the global supply of international reserves
Anonymous Profile
Anonymous answered
Date founded
Anonymous Profile
Anonymous answered
The function of the International Monetary System is to make it easier to exchange currency between different countries.  It establishes the rules in which countries value and exchange their currency.  It keeps the countries at peace; if we didn’t have it then countries may not agree on the value of each other’s currency.
Ady Mat Profile
Ady Mat answered
It's objectives are to fund the developing economies along with funding organization's projects that involves public welfare.

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