Presented bySyamily.Jeena

ROLE AND FUNTIONS OF

IMF AND WORLD BANK

IMF(Indian Monitory Fund)

“ It is an organization of 186 countries ,workingto foster global monetary cooperation , securefinancial stability ,facilitate international trade,promote high employment and sustainable economicgrowth and reduce poverty”.

The IMF is the most detailed attempt toorganize the conduct of international monetary affairs.

The International Monetary

Fund was created in July 1944, originally with 45

members, with a goal to stabilize exchange rates and

assist the reconstruction of the world's international

payment system. Countries contributed to a pool which

could be borrowed from, on a temporary basis, by

countries with payment imbalances. (Condon, 2007).

Purposes of the IMF

Articles of Agreement of the IMF,

i) Promote international monetary cooperation.

ii)Expansion and balanced growth of international trade.

iii) Promote exchange rate stability.

iv)Help establish multilateral system of payments and

eliminate foreign exchange restrictions

v) make resources of the Fund available to members

vi) Shorten the duration and lessen the degree of

disequilibrium in international balances of payments

Role Of IMF

• To promote international monetary cooperation.

• To facilitate the expansion and balanced growth ofinternational trade.

• To promote exchange stability.

• To assist in the establishment of a multilateralsystem of payments.

• To give confidence to members by making theIMF’s general resources temporarily available tothem under adequate safeguards.

• To shorten the duration and lessen the degree ofdisequilibrium in the international balances ofpayments of members.

Functions Of IMF

World Bank provides various technical services to themember countries. For this purpose, the Bank hasestablished “The Economic Development Institute” and aStaff College in Washington.

Bank can grant loans to a member country up to 20% ofits share in the paid-up capital.

The quantities of loans, interest rate and terms andconditions are determined by the Bank itself.

Generally, Bank grants loans for a particular project dulysubmitted to the Bank by the member country.

The debtor nation has to repay either in reserve currenciesor in the currency in which the loan was sanctioned.

.

Cont………..

Bank also provides loan to private investorsbelonging to member countries on its ownguarantee, but for this loan private investors haveto seek prior permission from those countieswhere this amount will be collected

International Monetary Cooperation.

Promote exchange Rate stability.

To help deal with Balance of Paymentsadjustment.

Help Deal With Economic Crisis by providinginternational coordination.

WORLD BANK

The World Bank is a United

Nations international financial institution that provides

loans to developing countries for capital programs.

The World Bank is a component of

the World Bank Group, and a member of the United

Nations Development Group. The World Bank's official

goal is the reduction of poverty. According to its Articles

of Agreement, all its decisions must be guided by a

commitment to the promotion of foreign

investment and international trade and to the facilitation

of capital investment.

Jim Yong Kim, the current President

of the World Bank Group

Role of World Bank

SURVEILLANCE

Involves the monitoring of economic and financialdevelopments, and the provision of policy advice, aimedespecially at crisis-prevention.

LENDS

The IMF also lends to countries with balance of paymentsdifficulties, to provide temporary financing and to supportpolicies aimed at correcting the underlying problems; loans tolow-income countries are also aimed especially at povertyreduction.

TECHNICAL ASSISTANCE

The IMF provides countries with technical assistance andtraining in its areas of expertise.

Role of World Bank

Functions of World Bank

World Bank performs the following functions:

(i) Granting reconstruction loans to war devastated countries.

(ii) Granting developmental loans to underdeveloped countries.

(iii) Providing loans to governments for agriculture, irrigation, power, transport, water supply, educations, health, etc.

(iv) Providing loans to private concerns for specified projects.

(v) Promoting foreign investment by guaranteeing loans provided by other organisations.

Cont…….

• (vi)Providing technical, economic and monetary

advice to member countries for specific projects

• (vii) Encouraging industrial development of

underdeveloped countries by promoting eco-

nomic reforms.

THANK YOU

SYAMILY