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IMF

By Shubhangi Shukla

Early 1850-1940 Gold Exchange Trade Each currency was linked to Weight of Gold Britten Woods in USA in 1944 Main Objective Revise Existing Monetary Rules Plan a system for Monetary Exchange Est. International Institution The Decided on I ounce gold = $35 Every Country can define its own currency as per the above valuation Cab adjust +/- 1%

About IMF
Organization of 187 Member Countries Working for
Faster Global Monetary Cooperation Secure Financial Stability Facilitate International Trade Promote High Employment Sustainable Economic Growth Reduce Poverty

Why IMF was Created


1930s Great Depression, Currency Devaluation for more export, Limit or Ban on import to have a stock of foreign currency, International Trade was affecting, Barriers to foreign trade, Employment & Standard of living affected, World War II

Fact Sheet
Created in July 1944 in Bretton Woods USA. With 45 member countries (India Founder Member). Currently 187 Member Countries Headquarters is in Washington D.C., USA. Christine Lagarde (France) is the M.D. Main aim to stabilize exchange rate. Assist world in reconstruction international payment system.

Organization & Management


Board of Governors from each member countries. They are Finance Minister or Governor of Central Bank. 24 of these Governor sits on IMF Committee & meet 3 times in a year. Governor are repreent Has 24 executive elected members to monitor day to day activities and MD is one of them. MD for 5 yrs and can be re-elected.

Main Responsibilities
Promoting International Monetary Cooperation, Expansion & Growth of International Trade, Promote Exchange Stability, Assisting in establishment of multilateral system of payments, Making resource available to members to overcome BOP difficulties. IMF analysis the economic position of member countries with their representatives at least once every year

IMF Responsibility
Surveillance: - publishes global economy
reports like World Economic Outlook & Global Financial Stability Report.

Technical Assistance: - consultancy for


making better economy.

Financial Assistance: - provide finance to


correct BOP.

IMF Sources of Money


Quota according to Members Economy India has 1.91% of quota with 4.547 Billion SDRs. US has 17.09 % of quota with 30. 476 billion SDRs. Each member country pays 25% in SDRs or $/Y/F/E and remaining 75% in home currency. May borrow from Strong Financial Economies.

Main Lending Facility


Stand By-Arrangements: - Most popular with
middle income countries for BOP difficulties, Short term Liquidity Facility: - for temporary liquidity problems in emerging markets, Emergency Assistance: - for coping with natural disasters or military conflicts, Extended Fund Facility: - for long term structural reforms, Trade Integration Mechanism: - for countries facing multilateral trade liberalization.

Special Drawing Rights


Created in 1969, Consists of US Dollar(44%), European Euro (34%),Britain Pound(11%) & Japan Yen (11%). 1 SDR = $ 1.57, SDR Interest rate is related to Money Market rate of the 4 countries which is 0.26%.

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