IMF
International Monetary Fund
What is the IMF?
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The IMF is an international
organization of 185 member
countries. It was established to
promote international monetary
cooperation, exchange stability,
and orderly exchange
arrangements; to foster economic
growth and high levels of
employment; and to provide
temporary financial assistance to
countries to help ease balance of
payments adjustments.
Why was it created?
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The IMF was conceived in July 1944, when
representatives of 45 governments meeting in
the town of Bretton Woods, New Hampshire,
in the northeastern United States, agreed on a
framework for international economic
cooperation.
What does it do?
• Surveillance
• Lending
• Technical assistance
Surveillance
It is an assessment of economic and financial developments, which provides a framework that
facilitates the exchange of goods, services, and capital among countries and sustains sound
economic growth. It consists in:
Focusing on assessing whether countries' policies promote external stability
It is to be remembered that surveillance is a collaborative, candid, and evenhanded process
between the Fund and its members
Lending
- IMF lending enables countries to rebuild their international
reserves; stabilize their currencies; continue paying for imports; and
restore conditions for strong economic growth.
- IMF does not lend for specific projects.
- It eases the adjustment policies and reforms that a country
must make to correct its balance of payments problem and
restore conditions for strong economic growth.
Technical assistance
• It supports the development of the
productive resources of member countries by
helping them to effectively manage their
economic policy and financial affairs.
• About 90 percent of IMF technical assistance
goes to low and lower-middle income
countries, particularly in sub-Saharan Africa
and Asia.
Success of the IMF:
Jamaica
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The IMF praised the government for
tackling its huge debt burden and
improving investor confidence.
It has also laid out plans to reduce the
country's debt as a percentage of GDP
from its current level of 145% to 100%
by 2009.
economic growth of up to 4% a year was
possible, it said, given a recovery in
tourism and mining sectors.
Failures: Argentina