The Role of IMF in the World Monetary System

Abstract

The purpose of this research paper is to discuss role of International Monetary Fund (IMF), its role in the world and significance. One of the major tasks of the IMF was to counsel governments in countries needing structural economic reforms. The International Monetary Fund (IMF) is a voluntary organization of 187 member countries that operates as a major multilateral institution. Its goals include promoting international monetary cooperation and stability of the exchange rate, thus aiding the expansion of international trade and economic well-being of its member states. Furthermore, the paper will discuss the history of IMF, its structure, governance, and weaknesses. All the related content of the paper will be discussed with reference to the role of IMF in the world monetary system.

Table of Contents

Abstract1

Introduction3

History5

Structure and Governance7

The IMF Today9

Role of IMF in the World12

From Lending to the Poor to Lending to the Rich16

Major Weaknesses of the IMF17

Conclusion19

End Notes21

Appendix23

The Role of IMF in the World Monetary System

Introduction

The International Monetary Fund (IMF) is an organization headquartered in Washington, D.C., whose purpose is to ensure international monetary cooperation, promote the growth of international trade, ensure the stability of financial exchange, provide assistance for countries in debt, and ultimately advance global financial stability. It monitors the economic progress of countries and provides technological assistance and training. In 2010, 187 nations belonged to this organization. The ways in which people practice and understand religion can transform as a result of changing economic circumstances. The policies of the IMF, which have a deep impact on the developing world, should also be understood as a causal force of religious change.

The International Monetary Fund (IMF) is a voluntary organization of 187 member countries that operates as a major multilateral institution. Its goals include promoting international monetary cooperation and stability of the exchange rate, thus aiding the expansion of international trade and economic well-being of its member states. The IMF was created, along with the World Bank, at the Bretton Woods conference in July 1944, only weeks after the landing of allied troops in Normandy. It was initially conceived as the cornerstone of the international monetary system of fixed exchange rates that was to be instituted in the aftermath of World War II. The consensus among the Allied forces at that time was that a fixed exchange rate system was needed to prevent the reappearance of the kind of “competitive devaluation” and other beggar-thy-neighbor policies that had prevailed as reactions to the financial crisis of 1929 and were then widely regarded as having played a major part in the depth and length of the Great Depression of the 1930s. The initial British plan, put forth by John Maynard Keynes, was to institute a world exchange system based on a new world liquidity instrument, the bancor, which would be issued and managed by a genuine world central bank. This plan had been rejected by the U.S. delegation which favored the so-called gold exchange standard: All currencies have to be convertible ...