Saturday, November 14, 2015

International Monetory Fund (IMF) For IBPS Examinations



IMF is an organisation of 188 countries. It headquarters in Washington D.C. The United States. The International Monetary Fund was conceived in July 1994 during the United Nations Monetary and Financial Conference. The representatives of 45 countries met to agree on a framework for international economic co-operation. The IMF was formally organised on 27th December,
1945, when the first 29 countries signed its Articles of Agreement.

Main Objectives of IMF


  • To promote international monetary cooperation.
  • To facilitate international trade.
  • To ensure stability to foreign exchange rates.
  • To Promote high employment and sustainable economic growth.
  • To reduce disequilibrium in the international balance of payments of member countries.
  • To promote capital investment in backward and underdevelopment countries.
  • To assist in the establishment of a multinational system of payments in respect of current transactions between the member countries.
  • To secure multilateral currency convertibility (i. e., to convert the currency of any member into the currency of any other member)
  • To foster global growth and economic stability.
  • To provide policy and financing to developing nations to achieve macroeconomic stability and reduce poverty.


Member Nations of IMF

Presently, the IMF has 188 member countries. To become a member country has to apply and then be accepted by majorly of members. Upon joining each member of the IMF is assigned a quota based broadly on its relative size in the world economy.

Subscriptions

A member's quota subscription determines the maximum amount of financial resources the member is obliged to provide to IMF.  25 percent of full subscription must be paid in IMF's own currency (called SDR Special Drawing Rights) or widely accepted the currency. Quotas are measured in SDRs. An SDR is the measuring unit of the IMF and is also used as a base for a unit by a number of international and national organisations.  SDR value is based on a basket of four key currencies (US Dollar, Japanese Yen, Pound Sterling and Euro)

The quota largely determines the voting power.  Each IMF member has 250 basic votes plus one additional vote for each SDR 100000 of quota.  The amount of financing a member can obtain from IMF is based on its quota. 

IMF and India

India is a founder member of IMF. The finance minister is an ex-officio governor or the board of governor for IMF. RBI governor is an alternate governor for IMF.


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