2. IMF(Indian Monitory Fund)
“ It is an organization of 186 countries ,working
to foster global monetary cooperation , secure
financial stability ,facilitate international trade
,promote high employment and sustainable economic
growth and reduce poverty”.
The IMF is the most detailed attempt to
organize the conduct of international monetary affairs.
3. The International Monetary
Fund was created in July 1944, originally with 45
members, with a goal to stabilize exchange rates and
assist the reconstruction of the world's international
payment system. Countries contributed to a pool which
could be borrowed from, on a temporary basis, by
countries with payment imbalances. (Condon, 2007).
4. Purposes of the IMF
Articles of Agreement of the IMF,
i) Promote international monetary cooperation.
ii)Expansion and balanced growth of international trade.
iii) Promote exchange rate stability.
iv)Help establish multilateral system of payments and
eliminate foreign exchange restrictions
v) make resources of the Fund available to members
vi) Shorten the duration and lessen the degree of
disequilibrium in international balances of payments
5. Role Of IMF
• To promote international monetary cooperation.
• To facilitate the expansion and balanced growth of
international trade.
• To promote exchange stability.
• To assist in the establishment of a multilateral
system of payments.
• To give confidence to members by making the
IMF’s general resources temporarily available to
them under adequate safeguards.
• To shorten the duration and lessen the degree of
disequilibrium in the international balances of
payments of members.
6. Functions Of IMF
World Bank provides various technical services to the
member countries. For this purpose, the Bank has
established “The Economic Development Institute” and a
Staff College in Washington.
Bank can grant loans to a member country up to 20% of
its share in the paid-up capital.
The quantities of loans, interest rate and terms and
conditions are determined by the Bank itself.
Generally, Bank grants loans for a particular project duly
submitted to the Bank by the member country.
The debtor nation has to repay either in reserve currencies
or in the currency in which the loan was sanctioned.
.
7. Cont………..
Bank also provides loan to private investors
belonging to member countries on its own
guarantee, but for this loan private investors have
to seek prior permission from those counties
where this amount will be collected
International Monetary Cooperation.
Promote exchange Rate stability.
To help deal with Balance of Payments
adjustment.
Help Deal With Economic Crisis by providing
international coordination.
8. WORLD BANK
The World Bank is a United
Nations international financial institution that provides
loans to developing countries for capital programs.
The World Bank is a component of
the World Bank Group, and a member of the United
Nations Development Group. The World Bank's official
goal is the reduction of poverty. According to its Articles
of Agreement, all its decisions must be guided by a
commitment to the promotion of foreign
investment and international trade and to the facilitation
of capital investment.
9. Jim Yong Kim, the current President
of the World Bank Group
11. SURVEILLANCE
Involves the monitoring of economic and financial
developments, and the provision of policy advice, aimed
especially at crisis-prevention.
LENDS
The IMF also lends to countries with balance of payments
difficulties, to provide temporary financing and to support
policies aimed at correcting the underlying problems; loans to
low-income countries are also aimed especially at poverty
reduction.
TECHNICALASSISTANCE
The IMF provides countries with technical assistance and
training in its areas of expertise.
Role of World Bank
12. Functions of World Bank
World Bank performs the following functions:
(i) Granting reconstruction loans to war devastated
countries.
(ii) Granting developmental loans to underdeveloped
countries.
(iii) Providing loans to governments for agriculture,
irrigation, power, transport, water supply, educations,
health, etc.
(iv) Providing loans to private concerns for specified
projects.
(v) Promoting foreign investment by guaranteeing
loans provided by other organisations.
13. Cont…….
• (vi)Providing technical, economic and monetary
advice to member countries for specific projects
• (vii) Encouraging industrial development of
underdeveloped countries by promoting eco-
nomic reforms.
