INTERNATIONAL MONETARY FUND

(IMF)

Name: Eesha Arshad

Class and Semester: MDDS-II
Course: International Organization
INTRODUCTION OF IMF:

 International Monetary Fund is an

organization that consists of 186 countries
which aims to foster global monetary
cooperation, facilitate international trade, and
secure the financial stability and economic
growth. It aims to promote high employment
and reduce poverty from all around the world.
 This organization provides policy advices and
economic help to the members who face difficulties in finances. It also
works with developing states and helps them to achieve macroeconomic
stability and therefore reducing poverty.
 There are 186 countries which are the part of this organization. The
organization helps their members when they are in need. It tracks the
economic trends and the performances of the states. It provides a forum to
the member counties for having a policy dialogue and discussions on how to
tackle economic difficulties.

KEY AIMS OF THE ORGANIZATION:

Some of the aims and key activities of the organizations are as following:

i. Providing Policy advises to the governments and the central banks by

considering a deep analysis on the economic trends.
ii. It provides loan to the countries that are economically devastated.
iii. It tracks global, regional and individual economic markets and forecasts how
the things will be in future.
iv. It also provides technical assistance and training, to help counties improve
the management of their economies.

OBJECTIVES OF IMF:

Following are some of the objectives of IMF:

i. It promotes international monetary cooperation.

ii. It facilitates the expansion and balanced growth of international trade
iii. It aims to establish a multilateral system of payments
iv. It promotes exchange rate stability.
v. It aims to provide resources available to its member’s counties who are
experiencing the problems of Balance of power.

FUNCTIONS OF IMF:

Following are some of the functions that are the aim of the IMF. These functions
ensure stability in international fiscal system.

i. In the time when the members of the organization feel difficulty in balancing
the economic and financial situation, the IMF facilitates them by providing
loans at certain criteria.
ii. It promotes economic stability and global growth by encouraging countries
to adopt financial and economic policies and strategies. It regulates and
monitors developments at national, regional and at global level.
iii. It also offers technical assistance and training to help member countries
strengthen their capacity to design and implement policies.
STRUCTURE OF IMF:

i. Board of Governors:

This organ is the highest decision-making body of the IMF. This body consists of
participation from all the countries. It consists of one governor and one alternate
governor for each member country. This governor is appointed by the country
itself and usually the minister of finance is the one. They also appoint executive
directors and they retain the ultimate power to regulate issues related to
interpretation of IMF.

ii. Executive Board:

Usually, the rights owned by Boards of Governors have delegated most of its
powers to IMF’s executive board. The board retains the rights to approve quota
and the admittance of new members in the organization.
KEY ACHIEVEMENTS OF IMF:

The achievements of IMF are much more and as an organization, it’s successful in
many ways. Some of the key achievements are as following:

i. Stability in Exchange Rates:

IMF has allowed the variations in exchange rates by 1 percent where as the
fluctuation rate is 2.5 percent. Therefore the system of exchange rate under
the IMF combines the elements of stability with flexibility.
ii. Promotion of International Trade:
It has created facilities for the member countries for financing and adjusting
the balance of payments deficits. It promotes multilateral assistance which
enables the member countries to correct their payments disequilibrium
iii. Check on Multiple Exchange Rates:
IMF has not approved countries adopting the complex and restrictive system
of exchange rates and has brought a simplified and rational exchange
system.
iv. Institution for Consultation and Guidance:
IMF is an organization that has created a platform for the member countries
where they can share their economic problems and can ask for help
whenever they feel for. It provides a forum for discussions on monetary,
fiscal and trade problems.
SHORTCOMING OF IMF:
Few shortcomings of IMF are as following which is the point of objections
as well is:
i. Lack of flexibility:
The organization lacks flexibility in its approach. Its demanding, hence it’s
found as incapable of making required rapid changes in its operations
 whenever there are rapid changing’s in the international economic
conditions.
ii. Stiff clauses and Conditions:
The condition on which the help is offered to the member countries is a stiff
one. These conditions are sometimes not even possible to solve or so.
CONCLUSIONS:
The achievements of IMF are much more than its shortcomings. As a whole
the organization is somewhat successful in gaining its objectives. It provides
fiscal help to states which are economically devastated. This organization
might not be able to deal with the issues 100% but still have worked far
better.