International Monetary Fund (imf)
IMF (along with World Bank) was created in 1944 when representatives from 44 nations met at Bretton Woods, New Hampshire to draw up a plan for post-WWII economic order.
The International Monetary Fund (headquartered in Washington DC) is an organization of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
The IMF’s primary purpose is to ensure the stability of the international monetary system by:
- Keeping track of the global economy and the economies of member countries
- Lending to countries with balance of payments difficulties
- Giving practical help to members
- Quota subscriptions are a central component of the IMF’s financial resources. Each member country of the IMF is assigned a quota, based broadly on its relative position in the world economy.
- The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves.
- Gold remains an important asset in the reserve holdings of several countries, and the IMF is still one of the world’s largest official holders of gold.
- After the Bretton Woods system (system of fixed exchange rates) collapsed in 1971, the IMF has promoted the system of floating exchange rates. Countries are free to choose their exchange arrangement, meaning that market forces determine the value of currencies relative to one another.
- Its flagship publications are:
- World Economic Outlook
- Global Financial Stability Report
Special Drawing Right (SDR)
- The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves. So far SDR 204.2 billion (equivalent to about US$291 billion) has been allocated to members, including SDR 182.6 billion allocated in 2009 in the wake of the global financial crisis. The value of the SDR is based on a basket of five currencies—the U.S. dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling.