Write five functions of IMF do you think that functioning on imf is really democratic?
Answers
Functions of IMF
1. The International Monetary Fund functions as a short term credit institution.
2. It provides the machinery for the orderly adjustments of exchange rates.
3. It acts as a reservoir of the currencies of all the member countries. Here the borrower nation can borrow the currency of other nations.
4. It is a lending institution in foreign exchange. It grants loans for financing current transactions only and not capital transactions.
5. It provides a machinery for international consultations.
It does not function on democratic lines. It is financed by the participating countries. Each country's contribution is fixed in terms of quotas according to the relative importance of its prevailing national income and international trade. The contributed quota of a country determines its borrowing rights and voting strength.