2. International Monetary Fund
IMF is the intergovernmental
organization that oversees
the global financial system by
following the macroeconomic
policies of its member countries,
in particular those with an impact
on exchange rate and the balance
o It is an organization formed with a stated objective of stabilizin
g international exchange rates and facilitating development thro
ugh the enforcement of liberalizing economic policies on other
countries as a condition for loans, restructuring or aid.
o IMF is a forum of national economic policies, international mo
netary and financial systems, which involves active dialogue wi
th each member country.
IMF was created in 1946.
IMF started to make service with I
BRD (International Bank of Rec
onstruction and Development) in
The IMF was created to support or
derly international currency exc
hanges and to help nations having
balance of payment problems thro
ugh short term loans
6. Purposes of the IMF
o Promote international monetary cooperation.
o Expansion and balanced growth of international trade.
o Promote exchange rate stability.
o The elimination of restrictions on the international flow of capita
o Help establish multilateral system of payments and eliminate fo
reign exchange restrictions.
7. ROLE OF IMF
• Focusing on its core macroeconomic and financial areas of
• Working in a complementary fashion with other institutions
• Collection and allocation of reserves. Rendering advice to
member countries on their international monetary affairs.
8. Where does the IMF get it’s Money
• Most loans are provided by member countries, determined by t
heir quota, which is calculated based upon a country’s relativ
e size in the world economy.
• For a closer look at the Member Quotas we can reference the I
• Upon joining, the 25% of the quota is paid in some major curr
ency US Dollar, British Pound, Yen while the remaining 75% i
s paid in their own currency.
9. Role of IMF in INDIA
• Joined IMF on 27 DEC, 1945
• India borrowed SDR 3.9 billion (1981-82) & SDR 2.2 billion (199
• In recent years, the fund provided to India was in government sec
urities, foreign exchange market, public expenditure management
& tax & custom administrations.
10. India and the IMF
• India and the IMF has a positive relationship. The IMF has
provided financial assistance to India, which has helped in
boosting the country's economy.
• The IMF praised the country for it was able to avoid the
Asian Financial Crisis in 1999 and was also able to
maintain the average rate of growth of its economy.
11. Where the IMF gets its money
• Most comes from the quota subscriptions
– The money each member contributes when joining the I
• General Arrangements to Borrow (1962)
– Line of credit set up with several governments and bank
s throughout the world
12. How much money a member can
borrow from the IMF
• 25% of the country’s quota may be used.
• If this is not sufficient, then members can borrow up to 3 times
the amount of its quota
– present plans for reform to Executive Directors
• If these plans are sufficient for the Executive Directors, the IM
F grants the member a loan.
The IMF’s primary purpose is to safeguard the stability of the intern
ational monetary system—the system of exchange rates and interna
tional payments that enables countries (and their citizens) to buy go
ods and services from each other. This is essential for achieving sus
tainable economic growth and raising living standards.
Providing advice to members on adopting policies that can hel
p them prevent or resolve a financial crisis, achieve macroeconomi
c stability, accelerate economic growth, and alleviate poverty.