Organisation for Facilitating Globalization - IMF and World Bank
The International Monetary Fund was organized during the year, 1946 followed by commercial operation in March, 1947. International Monetary Fund has been set up with the following main objectives: a.
Solving the short term balance of payments problems faced by the member nations; b.
Widest extension of multilateral trade and payments between the countries; c.
Elimination of reduction of existing exchange controls;
Establishment and maintenance of currency convertibility with stable exchange rate.
The fund is an autonomous organization affiliated to United Nations Organisation. Starting from the initial membership of 31 countries at the time of inception, the Fund has a membership of 186 countries. It is financed by various participating countries with each country’s contribution fixed in terms of quotas according to the relative importance of the national income prevalent in the country and international trade.
The total financial resources of the fund is equal to the quotas of all the countries combined together. The contributed quota of a country determines its borrowing rights and voting strength.
The following are the functions of International Monetary Fund: 1.
Monitoring economic and financial developments of its members; 2.
Providing machinery for international consultations;
Providing machinery for altering sometimes the par value of currency of a member country; 4.
Functioning as a short term credit institution;
Lending institution in terms of foreign exchange;
Providing machinery for the orderly adjustment of exchange rates and 7.
Functioning as a reservoir of the currencies of all the member nations who can borrow the currency of other nations. 8.
Granting loans for financing current transactions other than capital transactions;
The International Bank of Reconstruction and Devlopment popularly known as the World Bank was formed as a part of...
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