waht is IMF?? please answer me
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The International Monetary Fund (IMF) is an organization of 189 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
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The International Monetary Fund (IMF) is the central institution embodying the international monetary system and promotes balanced expansion of world trade, reduced trade restrictions, stable exchange rates, minimal trade imbalances, avoidance of currency devaluations, and the correction of balance-of-payment problems. The IMF's goal is to prevent and remedy international financial crises by encouraging countries to maintain sound economic policies. Because of its size, the IMF is also a forum for discussion of global economic policies.
The IMF is headquartered in Washington, D.C., but has offices in Paris, Tokyo, New York, and Geneva.
How it works (Example):
The IMF formally came into existence in December 1945 with 29 member countries after it was conceived during negotiationsof the Bretton Woods Agreement in 1944. It was originally tasked with establishing exchange rates after World War II through regulation of rates among the member countries.
Between 1944 and 1971, most of the world operated under a fixed exchange-rate system, which required each country to maintain a reserve balance of other currencies in order to weather temporary supply and demand problems. Thus, the IMF required each member country to deposit currency into an interest reserve fund. The IMF then loaned these funds to nations with balance-of-payment problems.
Today, the IMF promotes its objectives through surveillance and consultation with member countries rather than regulation. It still provides short-term loans to member countries having balance-of-payment problems, and countries seeking assistance must meet or exceed certain thresholds related to inflation rates, budget deficits, money supplies, and political stability.
Mechanics of the IMF
The IMF is run by a board of governors, which makes decisions on major policy issues but delegates day-to-day decision making to the executive board. All member countries are represented on the board of governors, which meets once per year. Each member country appoints a governor and an alternate governor to represent it to the IMF. The governors are usually the ministers of finance or governors of their central banks.
The IMF's 24-member executive board is chaired by a managing director. The managing director is selected by the executive board every five years, and three deputy managing directors, each from a different region of the world, report to the managing director.
The executive board meets three times a week, and the IMF's five largest shareholders (the United States, Japan, France, Germany, and the United Kingdom) as well as China, Russia, and Saudi Arabia, each have a seat on the board. The other sixteen directors are elected for two-year terms by groups of countries.
There are several committees within the IMF. The International Monetary and Financial Committee, which is a committee of the board of governors, meets twice per year to evaluate policy issues relating to the international monetary system. The IMF Development Committee, which is composed of members of the boards of governors of both the IMF and the World Bank, advises and reports to the IMF governors on matters concerning developing countries.
The IMF has a weighted voting system that gives more votes to countries with larger economies. However, according to the IMF, most decisions are not made based on formal voting, but by consensus.
The IMF is funded by the subscriptions countries pay upon joining the IMF or when their subscriptions are increased. Members pay 25% of their subscriptions in Special Drawing Rights (SDRs) or in major currencies. The IMF can call on the remaining 75% as needed for lending.
The IMF determines a country's subscription amount based on its relative size in the world economy. The IMF may borrow money to supplement the funds received from subscriptions. Generally, the IMF may borrow money from several countries that participate in one of two standing lending agreements with the IMF.
IMF Operations
The IMF monitors economic and financial developments and policies in member countries and at the global level and then gives policy advice to its members based on its observations and experience. IMF advice generally focuses on macroeconomic, financial-sector regulation, and structural policies. To do this, the IMF engages in three types of surveillance: country surveillance, global surveillance, and regional surveillance. During country surveillance, which occurs annually, a team of economists visits a member country to collect data, examine policies, and meet with government and bank officials. The team submits its findings to the IMF executive board, which makes recommendations to the country. The IMF's global surveillance functions center around the publication of the World Economic Outlook and Global Financial Stability reports, which are issued twice a year. Regional surveillance usually occurs within a series of internal IMF discussions about developments in certain regions or within groups of countries.