Write A Note On The International Monetary Fund (IMF)

The IMF was the outcome of Bretton woods conference of 1944. The main purpose of IMF were to provide exchange stability, temporary assistance to countries falling short of foreign exchange and take international measure for curing the adverse balance of payment. IMF is a pool of central bank reserves and national currencies which are available to its members under certain conditions.

Objectives of the Fund:

a). To promote international monetary co-operation among the different countries.
b). Adopt different measures to promote international trade.
c). Adopt measures to reduce restrictions on international trade imposed by the different countries.
d). To help the member countries in receipt and payment.
e). Provide short term loans to correct the adverse balance of payment.
f). To promote exchange stability and maintain orderly exchange arrangements and avoid exchange depreciation.

In order to carry out these purposes, the IMF sells foreign exchange to its members so that they can meet the difficulties in the balance of payment. It advices the govt. on financial problems and recommends anti-inflationary measures in respect of investment, bank, credit govt. spending and taxation, the funds financial assistance takes the form of a foreign exchange transaction and each member of the fund is assigned a quota which approximately determines its voting power and the amount that it may draw in foreign exchange from the fund.