WHAT IS THE IMF?
IMF is an abbreviated form of The International Monetary Fund. The IMF is a special international financial agency that was established in the year 1944, in the month of July, at the Bretton Woods Conference.
However, it began its operations on the 27th of December, 1945. The IMF is headquartered in Washington, D. C, and consists of 190 countries. The general stated mission of the IMF is to help foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment, and reduction of poverty around the world.
In this article, we shall provide brief but detailed information on what the IMF is.
OBJECTIVES AND MISSION OF THE IMF
The IMF is aimed at providing support by collaborating with all of its 190 member countries, as well as international bodies in order to achieve sustainable growth.
In order to help achieve sustainable growth and prosperity in a country, the IMF provides support for economic policies which goes a long way to promote financial stability and monetary cooperation. Altogether, this support helps increase productivity, job creation, and the economic well-being of the country.
Moreso, as stated earlier, the IMF has its own missions. These missions are categorized into three: furthering international monetary cooperation, encouraging the expansion of trade and economic growth, and discouraging policies that would harm prosperity.
In ensuring the above-stated mission, the IMF provides policy advice where they monitor a country’s economic and financial developments and advising them. They also grant financial assistance by giving out loans and other financial aid to their member countries.
Also, in terms of capacity development, the IMF provides technical assistance and training to governments to help them implement economic policies that are very sound.
THE IMF FUNDING
Funds generated by the IMF in the implementation of its policies come from three sources. These sources include member quotas, credit arrangements, and bilateral borrowing agreements. The primary source of IMF funding is the member quota. It is this member quota of a country that helps to reflect the country’s size and position in the world economy.
Also, the main backstop for the quotas is the New Arrangement to Borrow(NAB) between the IMF and other groups of members and institutions. In terms of the bilateral borrowing agreements, member countries also have committed resources through these bilateral borrowing agreements.
The IMF has about SDR 707 billion or around the US $1 trillion money to lend to its member countries. Most of the funds or money comes from its members who contribute based on the position and size of their economy.
Additionally, approximately, there is 2,900 staff from 150 countries are working at the IMF. Countries that contribute most to the IMF are the United States, Japan, France, Germany, Italy, and the United Kingdom. The IMF organizational structure constitutes one governor and one alternative governor from each of the member countries. These boards of Governors meet once a year. Another assistance the IMF provides includes legislative framework and expenditure management.
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