International Monetary Fund (IMF)

Running head: ECONOMICS
Economics
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1ECONOMICS
Table of Contents
International Monetary Fund (IMF)...........................................................................................2
Functions of IMF........................................................................................................................3
Economic Surveillance...........................................................................................................3
Lending..................................................................................................................................3
Capacity Development...........................................................................................................3
Cost of IMF................................................................................................................................4
Need for IMF..............................................................................................................................5
References..................................................................................................................................6

2ECONOMICS
International Monetary Fund (IMF)
The International Monetary Fund (IMF) is a world organization having 189 member
countries. Headquarter of IMF is situated in Washington, D.C. The organization works to
promote monetary cooperation in the world. IMF is working to support international trade,
facilitate high employment, and foster sustainable economic growth and lower poverty across
the globe. The organization was formed in 1944 a Bretton Woods Conference. IMF was
formally coming into effect in 1945. Then only 29 countries formed the international
payment system. The organization now has a crucial role in managing difficulties in balance
of payment and maintaining monetary stability during the financial crisis. The member
nations govern the organization and it is accountable to is 189 member countries (imf.org,
2019) The member countries of IMF spread all over the world. The main purpose of IMF is
to stabilize global monetary system, exchange rate system and that of international payment
system enabling transaction between countries. The member countries contribute to IMF
through a system of quota using which the countries can borrow funding during crisis in
balance of payment. As recorded in 2016, the accumulated funds of IMF were SDR 477
billion.
Using the accumulated funds and other activities such like collecting statistics and
making analysis, investing current state of the economy and scrutinizing different policies
IMF attempts to improve state of economy. Two major source of funding of IMF are loans
and quotas. Quotas are the pooled funds from member countries. This constitutes the largest
part of IMF funds. Size of quota belonging to each of the member state depends on the
financial and economic position of the nation in the world. Countries having greater
economic importance contribute to larger quotas (Kentikelenis et al., 2015). In order to boost
resource base of IMF, there is a periodic increase in size of the quota. The activities of IMF