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The International Monetary Fund(IMF) is aninternational organization that oversees the globalfinancial system by following the macro economic

policies of its member countries, in particular thosewith an impact on exchange rates and the balanceof payments.

It is an organization formed with a stated objectiveof stabilizing international exchange rates and

facilitating development.It also offers highly leveraged loans mainly to

poorer countries. Its headquarters are located in

Washington, D.C., United States. The current chiefeconomist is Olivier Blanchard.


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The International Monetary Fund Was created in 1944,at the Bretton Woods conference to prevent the kinds ofchain reaction in the economic system that caused worldcurrencies to collapse like in the Great Depression of the1930s.

Bretton wood agreement was contracted in 1944 andIMF was created in 1946.

IMF started to make service with IBRD (international

bank of reconstruction and development) in 1947.

The IMF was created to support orderly internationalcurrency exchanges and to help nations having balanceof payment problems through short term loans of cash.


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IMF headquarters is in Washington D.C , U.S.A

Five largest shareholders are United States, Japan, Germany, France, United

Kingdom.

China, Russia, and Saudi Arabia have their own seats on the Board.

16 other Executive Directors are elected for two year terms by groups of countries,

known as Constituencies.

The International Monetary Fund (IMF) is an organization of 186 countries.


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In the beginning 29member countries

Today, 186 member countries.

Staff of about 2680

persons.

Headquarters in

Washington, D.C.


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IMF promote international monetary cooperation .

expansion and balanced growth of international trade.

IMF promote exchange rate stability .

help establish multilateral system of payments and eliminate foreignexchange restrictions.

IMF make resources of the Fund available to members.

Foster economic growth and high levels of employment.

IMF can make the price of foreign money to be safe.

IMF can solve the problem of countries that doesnt want to allow theforeign money to make their currencys value higher.


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Focusing on its core macroeconomic and financial areas of

responsibility.

Working in a complementary fashion with other institutions

established.

Collection and allocation of reserves.

Rendering advice to member countries on their international

monetary affairs.

Promoting research in various areas of international economics andmonetary economics.

Providing a forum for discussion and consultation among member

countries.

Being in the center of competence.


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Surveillance (like a doctor)Gathering data and assessing economic policies of countries.

Technical Assistance (like a teacher)Strengthening human skills and institutional capacity ofcountries.

Financial Assistance (like a banker)Lending to countries to support reforms


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The IMF's resources are provided by its member

countries primarily through payment of quotas.

The annual expenses of running the Fund have been

met mainly by the difference between interest receipts(on outstanding loans) and interest payments (onquotas used to finance the loans).

The total amount of quotas is the most important factordetermining the IMF's lending capacity.


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IMF assigned quota to each member nation basedbroadly on its relative size in the world economy.

A member's quota determines

its maximum financial commitmentto the IMF its voting power, and

has a bearing on its access to IMF financing.

Total quotas at end-August 2008 wereSDR 217.4 billion (about $341 billion).


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Quotas are denominated in Special Drawing Rights(SDRs)( the IMF's unit of account).

The largest member of the IMF is the United States, with aquota of SDR 37.1 billion (about $58.2 billion), and thesmallest member is Palau, with a quota of

SDR 3.1 million (about $4.9 million).


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10-12

18.3

5.7 5.7 5.1 5.1

0

5

10

15

20

US Germany Japan Britain France

Percent

Fig 10.0


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The SDR is an international reserve asset, created by the

IMF in 1969 to supplement the existing official reserves

of member countries. SDRs are allocated to member countries in proportion to

their IMF quotas.

The SDR also serves as the unit of account of the IMF

and some other international organizations.


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186 Member States

Board of Governors (1 from Each State)

Managing Director

Executive Board (24 Members)

Weighted Voting System:

oUS Representative holds 17% of total Voting Powero27 Countries together hold 1.4% of total Voting PoweroDecisions are most often made by consensus, rather than fractious

parliamentary fights.Board of Governors: one governor from each member country. Meetsonce a year.

Day to day affairs are guided by the Executive Board & 24 ExecutiveDirectors. Managing Director of IMF is Chairman of Executive Board.


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India and the IMF has a positive relationship. The IMF has provided financial

assistance to India, which has helped in boosting the country's economy.

The IMF praised the country for it was able to avoid the Asian Financial Crisis in1999 and was also able to maintain the average rate of growth of its economy.

The Managing Director of International Monetary Fund Rodrigo De Rato visited

India in May 2005.

In 2005, the IMF said that the budget of India is very positive for it points thatthe economy of the country will grow at the rate of 6.7%.

International Monetary Fund said that the reasons behind the economy growth of

India are that the RBI has been able to control inflation and has also handled itsmonetary policies very skillfully.


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The IMF works to foster global

growth and economic stability.

It provides policy advice and

financing to members ineconomic difficulties and also

works with developing nations

to help them achieve

macroeconomic stability andreduce poverty.

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