ARUN SHARMA 12-MBA-10

INTRODUCTION
Conceived in July 1944 during the United Nations

Monetary and Financial Conference

The representatives of 45 governments met in the Mount

Washington Hotel in the area of Bretton Woods, New Hampshire, United States.
IMF was formally organized on December 27, 1945, when

the first 29 countries signed its Articles of Agreement.

OBJECTIVES
To avoid the competitive devaluation and exchange control.
To establish and maintain currency convertibility

To develop multilateral trade and payments.

To promote international monetary co-operation through a

permanent institute. international trade.

To facilitate the expansion of balanced growth of

OBJECTIVES
To lend confidence to members by making the funds

resources available to them under adequate safeguards.

To shorten the duration and lessen the degree of

disequilibrium in the international balance of payments of members.

FUNCTIONS
Guardian of good conduct in the area of Balance of payments. Reducing tariffs and other trade restrictions.

Provides technical advice.

Provides short term financial assistance to its member

countries.

Provides machinery for orderly adjustment of exchange rates.

FUNCTIONS
Reservoir of currencies
Lending institution of foreign currencies. Machinery for altering the par values of the currency

of a member country.
International consultancy.
Conducts research studies and publishes report.

ROLE OF I.M.F
IMF SURVEILLANCE
Oversee the international monetary system and monitor

the economic and financial policies

IMF highlights possible risks to domestic and external

stability and advises on needed policy adjustments

Facilitates the exchange of goods, services, and capital

among countries, thereby sustaining sound economic growth

ROLE OF I.M.F
IMF LENDING
Core responsibility : To provide loans to member

countries experiencing balance of payments problems

Financial assistance enables countries:

To rebuild their international reserves To Stabilize their currencies; To Continue paying for imports

ROLE OF I.M.F
IMF LENDING
Restore conditions for strong economic growth while

undertaking policies to correct the underlying problems

The IMF does not lend for specific projects

ROLE OF I.M.F
TECHNICAL ASSISTANCE
Helps the members countries to effectively manage

their economic policy and financial affairs

Helps the countries to strengthen their capacity in

both human and institutional resources

To design appropriate macroeconomic,financial, and

structural policies.

WHAT IS SDR ?
An international reserve asset

Created by the IMF in 1969 to supplement its member

countries official reserves

Its value is based on a basket of four key international

currencies i.e. Dollar, Euro, Yen, Pounds

WHAT IS SDR ?
SDRs can be exchanged for freely usable currencies
September 9, 2009, the amount of SDRs increased from SDR

21.4 billion to SDR 204.1 billion

Every five years the basket of currencies changes The SDR is neither a currency, nor a claim on the IMF.

Rather, it is a potential claim on the freely usable currencies of IMF members

NEED OF SDRs
To support BRETTON WOODS fixed exchange rates

system
The international supply of two key reserve assets

gold and the U.S. dollarproved inadequate for supporting the expansion of world trade and financial development : The international community decided to create a new international reserve asset i.e. SDRs

STEPPING UP CRISIS LENDING : The IMF responded quickly to the global economic crisis, with lending commitments reaching a record level of more than US$250 billion in 2010. This figure includes a sharp increase in concessional lending (thats to say, subsidized lending at rates below those being charged by the market) to the worlds poorest nations. GREATER LENDING FLEXIBILITY : The IMF has overhauled its lending framework to make it better suited to countries individual needs. It is also working with other regional institutions to create a broader financial safety net, which could help prevent new crises. PROVIDING ANALYSIS AND ADVICE :The IMFs monitoring, forecasts, and policy advice, informed by a global perspective and by experience from previous crises, have been in high demand and have been used by the G-20.

DRAWING LESSONS FROM THE CRISIS. The IMF is contributing to the ongoing effort to draw lessons from the crisis for policy, regulation, and reform of the global financial architecture. HISTORIC REFORM OF GOVERNANCE.The IMFs member countries also agreed to a significant increase in the voice of dynamic emerging and developing economies in the decision making of the institution, while preserving the voice of the low-income members.

There were two important developments in FY2011. First, a major agreement on governance reform affecting quotas and the composition of the institutions Executive Boardwas reached in December 2010. And second, the 2008 quota reform, which strengthens the representation of dynamic economies in the IMF and enhances the voice and participation of lowincome countries, entered into effect in March 2011

.
In 2010, the Flexible Credit Line (FCL) was enhanced to be more

useful and effective in crisis prevention. A new financing toolthe Precautionary Credit Linewas introduced, and made available to a wider group of countries than the FCL. The Fund also joined forces with its European partners to provide financial support to Greece and Irelandand Portugal as well, in May 2011. Since the crisis began, IMF financial commitments to help members weather the crisis have reached record levels, with General Resources Account credit outstanding at SDR 75.6 billion as of end-July 2011, compared with the previous peak of SDR 70 billion reached in September 2003.

 To better support its low-income members hit by the most catastrophic of natural disasters, the Fund established a Post- Catastrophe Debt Relief Trust, which

will enable IMF to join rapidly international debt relief efforts in these circumstances. The institutions work during FY2011 focused on providing policy advice and technical support to member countries to help achieve this goal, meeting the financing needs of countries to support their adjustment efforts, including through programs in Greece, Ireland, and Portugal (the latter in early FY2012), putting in place systems that will strengthen the institutions ability to identify and respond to global economic risks as they emerge, and working on reforms that will strengthen the international monetary system.

INDIA & IMF

Helps in foreign exchange crisis

Membership of the world bank

Economic consultation India has become a creditor and stopped taking loans

from it

CONCLUSION
The IMF is the worlds central organization for

international monetary cooperation .The IMFs primary purpose is to safeguard the stability of the international monetary systemthe system of exchange rates and international payments that enables countries (and their citizens) to buy goods and services from each other. This is essential for achieving sustainable economic growth and raising living standards.

BIBLIOGRAPHY
http://en.wikipedia.org/wiki/InternationalMonetaryF

und
www.imf.org http://www.imf.org/external/about/whatwedo.htm http://www.imf.org/external/pubs/ft/ar/2011/eng/pdf/

ar11_eng.pdf