International Monetary Fund

The International Monetary Fund (IMF) is an international organization. 189 countries are members of the International Monetary Fund. It has its headquarters in Washington, D.C., USA.

Origin 

In the 1930s, many countries faced economic problems. The standard of living declined, and a great many people were unemployed. International trade became much smaller. Some countries reduced the value of their currencies. All these factors combined in the 1930s, and an economic depression resulted. By late 1939, the Second World War had started. 

As the Second World War ended, most countries found that international values faced many restrictions and were not smooth. Leaders of many countries thought over these matters and discussed them in meetings and agreed on the Bretton Woods system. Thus, after the Second World War, many countries felt the need to have an organization to get help in monetary matters between countries. To begin with, 29 countries discussed the matter, and signed an agreement. The agreement was the Articles of Association of the International Monetary Fund. The International Monetary Fund came into being in 29th December 1945.

Membership 

Any country may apply to become a member of the IMF. When a country applies for membership, the IMF’s Executive Board examines the application. If found suitable, the Executive Board gives its report to IMF’s Board of Governors. After the Board of Governor clears the application, the country may join the IMF. However, before joining, the country should fulfill legal requirements, if any, of its own country. Every member has a different voting right. Likewise, every country has a different right to draw funds. This depends on many factors, including the member country’s first subscription to the IMF.

Functions 

The IMF does a number of supervisory works relating to financial dealings between different countries. Some of the works done by IMF are:

 Helping in international trade, that is business between countries
 Looking after exchange rates
 Looking after balance of payments
 Helping member countries in economic development
 It also provides a machinery for international consultations.

Management 

A Board of Directors manages the IMF. One tradition has governed the selection of two most senior posts of IMF. Firstly, IMF’s managing director is always European. World Bank's president is always from the United States of America. 

Current managing director is Bulgarian economist Kristalina Georgieva.

The major countries of Europe and America control the IMF. This is because they have given more money to IMF by way of first subscriptions, and so have larger share of voting rights.

List of managing directors

Comments 

Many people and countries have commented about IMF. Some are good and some are bad comments about the work of IMF. Despite many bad comments about IMF,  research shows that more than 60 percent of Asians and 70 percent of Africans feel that IMF has had a positive effect on their country.

Related pages
 World Bank Group
 Susan George

References

Other websites 
 International Monetary Fund website

International organizations
Economics organizations