WHY IMF ESTABLISHED

The Great Depression 1930s

Self-defeating attempts of countries to shore up their failing
economies.
World trade declined and employment and living standards
plummeted in many countries.
This breakdown led the IMF's founders to plan an institution
charged with overseeing the international monetary
system.
The system of exchange rates and international payments.
Ensure exchange rate stability and to eliminate exchange
restrictions that hindered trade.

WHEN IMF ESTABLISHED

IMF was conceived in July 1944, when representatives of 45
countries meeting in the town of Bretton Woods, New
Hampshire, in the northeastern United States, agreed on a
framework for international economic cooperation, to be
established after the Second World War.
The IMF came into formal existence in December 1945, when
its first 29 member countries signed its Articles of
Agreement.
It began operations on March 1, 1947.
The IMF's membership began to expand in the late 1950s and
during the 1960s as many African countries became
independent and applied for membership.

PURPOSES OF IMF
Provide a forum for cooperation on international monetary
problems.

Facilitate the growth of international trade, thus promoting

job creation, economic growth, and poverty reduction.
Promote exchange rate stability and an open system of
international payments.
Lend countries foreign exchange when needed, on a
temporary basis and under adequate safeguards, to help
them address balance of payments problems.

WHAT IS IMF
The International Monetary Fund (IMF) is an organization of 188
countries,
working to foster global monetary cooperation,
secure financial stability
facilitate international trade
promote high employment and sustainable economic growth
and reduce poverty around the world.

QUOTAS
The IMF's resources come mainly from the
money that countries pay as their capital
subscription when they become members.
Each member country's quota broadly reflects
the size of its economy.
The larger a country's economy in terms of
output and the larger and more variable its
trade, the larger its quota tends to be.
Quotas, together with the equal number of basic
votes each member has, determine countries
voting power
They also help determine how much countries
can borrow from the IMF

MEMBERSHIP
ORIGINAL MEMBERS:
The countries represented at the United Nations
Monetary and Financial Conference whose
governments accept membership before
December 31, 1945.
OTHER MEMBERS:
Membership shall be open to other countries at such
times and in accordance with such terms as may
be prescribed by the Board of Governors

MEMBERSHIP
The IMF has 188 member countries.
It is a specialized agency of the United Nations but
has its own charter, governing structure, and
finances.
Its members are represented through a quota
system broadly based on their relative size in the
global economy.

MEMBERSHIP CRITERIA
To become a member, a country must apply and then be
accepted by a majority of the existing members.
Upon joining, each member country of the IMF is assigned
a quota based broadly on its relative size in the world
economy.
A member country's quota defines its financial and
organizational relationship with the IMF, including;
Subscriptions: A member country's quota subscription
determines the maximum amount of financial resources
the country is obliged to provide to the IMF.
Up to 25 percent must be paid in the IMF's own currency,
called Special Drawing Rights (SDRs) or widely accepted
currencies (such as the dollar, the euro, the yen, or pound
sterling), while the rest is paid in the member's own
currency.

KEY IMF FUNCTIONS

Policy advice to governments and central banks based on
analysis of economic trends and cross-country
experiences.
Research, statistics, forecasts, and analysis based on
tracking of global, regional, and individual economies and
markets.
Loans to help countries overcome economic difficulties.
Technical assistance and training to help countries improve
the management of their economies.

HOW IMF DO IT
It has three main tools at its disposal to carry out its
mandate.
SURVEILLANCE: process of monitoring and
discussing countries economic and financial
policies is known as bilateral Surveillance.
On a regular basisusually once each yearthe
IMF conducts in depth appraisals of each member
countrys economic situation.
It discusses with the countrys authorities the
policies that are most conducive to a stable and
prosperous economy, drawing on experience
across its membership.

TECHNICAL ASSISTANCE AND TRAINING

For strengthen their capacity to design and implement
effective policies.
Offered in several areas, including fiscal policy, monetary and
exchange rate policies, banking and financial system
supervision and regulation, and statistics.
LENDING:
IMF financing provides member countries the breathing
room they need to correct balance of payments problems.

Management
Board of Governors
Each member country appoints one Governor and one
alternate Governor
Executive Board
24 Executive Directors which are representatives for the
members
Managing Director
The chairman of the Executive Board and head of the
staff
Managing Director CHRISTINE LAGARDE a French national,
joined the IMF as Managing Director in July 2011. Before
coming to the IMF, she was France's Minister for Economy,
Finance and Industry..

CRITICISM
Developed countries were seen to have a more dominant
role and control over less developed countries
The IMF has the obstacle of being unfamiliar with local
economic conditions, cultures, and environments in the
countries they are requiring policy reform.
Conditionality undermines domestic political institutions
Conditionality retard social stability and hence inhibit the
stated goals of the IMF

PHOTO OF IMF HEADQUARTERS IN

WASHINGTON