IMF is an intergovernmental organization that promotes international economic cooperation. International Monetary Fund (IMF) was set up by 44 nation under the Bretton Woods Agreement of July 1944. This institute was established on 27th December 1945, But it started it’s function on 1st march 1947.
Functions of IMF:
- To remove short term deficit in Balance of Payment (BOP).
- To maintain the stability in Exchange rate system.
- To Focusing in particular on policies that have an impact on the exchange rate.
Important Points to Remember about IMF:
- Headquarter at- Washington, D.C. ,United States
- Membership- 185 Nations (Founding); 187 Nations (To Date)
- The financial year of IMF – 1st May-30th April
- The Head of IMF is known as Managing Director.
- The head of IMF elected for 5 years. But can be removed earlier.
- Present head of IMF – Christine Lagarde [Former finance minister of France]
- Latest/ Last Member of IMF- Tuvalu
- Quotas and Voting Ranking- India occupy 9th Place in IMF General quotas where USA in 1st, Japan in 2nd, Germany in 3rd Place.
- Special Drawing Rights (SDR) – It was created by IMF in 1971. It is also known as Paper Gold.
- Cuba left IMF in 1964. Cuba is not a Member of IMF.
IMF performs the following functions.
- (i) Providing short terms credit to member countries for meeting temporary difficulties due to adverse balance of payments.
- (ii) Reconciling conflicting claims of member countries.
- (iii) Providing a reservoir of currencies of member-countries and enabling members to borrow on another’s currency.
- (iv) Promoting orderly adjustment of exchange rates.
- (v) Advising member countries on economic, monetary and technical matters.