The IMF full form is the International Monetary Fund. It was established in 1944 as an international organization to promote worldwide economic development, financial cooperation, economic security, international trade, and the alleviation of global poverty. The IMF is managed by a board of directors, each of whom represents one of the organization’s members nations. It is headquartered in Washington, D.C., and roughly 190 countries participate.
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The basic objective of the IMF is to construct a stable international financial system, as well as a stable system of currency exchange rates and international payments, so that nation can engage in trade. In three distinct ways, it accomplishes this:
- Maintains a database of global markets and member nation economies
- Lending to nations with the balance of payments difficulties
- Offering reps practical assistance
- Lending to nations having imbalances in their trade accounts
- Offering members practical assistance
- In 2012, the scope was amended to encompass all macroeconomic and financial sector issues that affect global sustainability.
Responsibilities of the IMF
- To maintain exchange stability, it can prevent exchange rate volatility.
- It permits member nations to reduce the balance-of-payments deficit by lending or selling foreign currency to participants.
- If major changes occur in the economies of its representatives, the organization may urge its members to revise the par value of their currencies.
- It provides member nations with economic and monetary ideas to assist stabilize their economies.
- It may designate money as a scarce, in-demand currency. It may increase its availability by borrowing from or purchasing from the country in question in exchange for gold.
- It permits members to borrow from the IMF in return for their own currencies. By repaying loans in convertible currencies, borrowing countries are compelled to repurchase their currencies.
- It offers technical help to countries who participate. It provides its professionals and experts with resources or might dispatch external experts to provide technical support to Member States.
