IMF: an Overview

IMF 

International Monetary Fund, this was established in 1944, but came with full rules and regulations on 27 December, 1945.

Its current office is at Washington DC and its current MD is Christina Legard from France.

Background

The world was badly ravaged by the Second World War, when it came to existence, to permote the idea of globalization and closeness of economy between the Nation to lead to a glorious future.

Main functions of IMF

1- It first task is to build closer relations between the economies and to assist in monetary cooperation.

2- To provide member states financial resources in the case of mal-adjustment in their Balance of Payment

3- Its main agenda is to abolish the hurdles and obstacles in the economic liberalizations.

4- To help in stabilization of exchange rates and to maintain good exchange arrangement.

5- After signing of EFF treaty, which means Extended Fund Facility, members can borrow money.

 

The body of IMF

It have board of directors, in this it have one governor and alternate governors from each member nations.

Day to day activities are managed by Managing director, chairman and board of executives directors, there are 24 of them.

IMF, considers member quota in every five year last was done in 2010.

 

INDIA in context of IMF

India is represented by the executive director in the board of executives, while Indian finance minister work as ex-officio and the Governor of RBI function as Alternate Governor.

India also represents the three nations, Bangladesh, Bhutan and Srilanka.

In 2010, the Indian quota was increased to 2.75%, it is 8th largest quota in IMF, out of 24 constituency.

India signed the EEF ( Extended Fund Facility) in 1981-82 fiscal year.

~ India had also borrowed money from the IMF twice, first in 1981-84, about 3.9 billion SDR, and then in 1991 about 3.5 billion SDR, when India was in serious trouble due to lack of balance of payment, after that in guidance of IMF India used the LPG way to develop its economy, which stand for Liberalization, Privatization and Globalization, under P V Narsimha Rao.

~ currently India is a benevolent contributor of IMF since 2002, and India also maintain a good amount of Reserve Ratio.

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