International Monetary Fund (IMF)

By Memon, Ziaul Haque | Economic Review, November 1999 | Go to article overview

International Monetary Fund (IMF)


Memon, Ziaul Haque, Economic Review


International Monetary fund was established in 1944 at the International Monetary and Financial Conference, Bretton Woods, New Hampshire, USA. It came into official existence on December 27, 1945 when 29 countries signed its Articles of Agreement hence commenced financial operations on March 1, 1947. There are 182 members as of September 1, 1998 and approximately 2,700 people are working for IMF from 110 countries. Mr. Camille Gutt, from Belgium was the first Managing Director of IMF and served from 1946 to 1951. France was the first member who availed IMF resources on May 8, 1947. The currency of IMF is Special Drawing Rights (SDR).

Valuation of Special Drawing Rights

SDR is IMF's official currency. It is calculated by selecting basket of currencies of top 5 countries for their large exports of goods and services during last five-year period ending 12 months before the effective date of revision. At present United States, Germany, Japan, United Kingdom and France are in the basket. for calculating the value of SDR, the first step is to evaluate the "currency amount" that can be computed by multiplying the percentage weights assigned as per their exports of goods and services with their average exchange rates for last three months at noon in London, the second step is to solve it with its "Current Exchange Rate" for each currency; the third step is just to add all currencies that ultimately calculate 1 SDR in comparison with US$. At present one SDR is equal to US$ 1.35784; or in other words one US dollar is equivalent to SDR 0.736464.

The "interest rate on SDR" is being calculated by taking weighted average yields of the following Money Market instruments:

* Market yield on 3 months Treasury bills of USA, UK and France.

* Market yield on 3 months German Interbank Deposit Rate; and

* Market yield on 3 months rate of Japanese Certificate of Deposits.

Statutory Purposes

The IMF was created to promote international monetary co-operation between the member countries. It was formed to act as monitor of world currencies by helping to maintain an orderly system of payments between all countries. Lends money to members who face serious balance of payment deficit. Apart from above following are the functions of IMF:

* To facilitate the expansion and balanced growth of international trade

* To promote exchange stability

* To assist in the establishment of a multilateral system of payments

* To make its general resources temporarily available to its members experience in balance of payments difficulties under adequate safeguards.

* To shorten the duration and lessen the degree of dis-equilibrium in the international balances of payments of members

* To provide technical support to its members.

Areas of Activity

Surveillance is the process by which the IMF appraises its members' exchange rate policies within the framework of a comprehensive analysis of the general economic situation and the policy strategy of each member.

Loans as of July 31. 1999: 94 Countries (SDR 63.6 billion = $87 billion).

Technical Assistance: Technical assistance consists of expertise and support provided by the IMF to its members as follow:

* the design and implementation of fiscal and monetary policy

* institution-building (such as the development of central banks or treasuries)

* the handling and accounting of transactions with the IMF

* the collection and refinement of statistical data

* to train officials at the IMF Institute together with other international financial organizations, through the Joint Vienna Institute, the Singapore Regional Training Institute, the Middle East Regional Training Programme, and the Joint Africa Institute.

Financial Facilities

Members avail IMF's financial resources by purchasing (drawing) other members' currencies or SDRs with an equivalent amount of their own currency. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

International Monetary Fund (IMF)
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.