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what does the international monetary fund mean the international monetary fund or imf is a
global organization with 190 member nations that engage in the following activities promotes global
economic growth and financial stability foster's global monetary corporation boosts international
trade encourages high employment and long-term economic growth it helps to alleviate poverty the
imf was founded in 1944 one year after the bretton woods conference it started on december 27 1945
principally by the views of harry dexter white and john maynard keynes it was established along with
its sister organisation the world bank to prevent financial catastrophes like the great depression
a global economic crisis that occurred in 1929 and lasted until around 1939. it was the world's
most prolonged and terrible depression ever endured by the industrialized
western world resulting in profound shifts in economic institutions theory and macroeconomic
policy frequently asked questions what is the international monetary fund's history
the international monetary fund was founded in 1945 as part of the bretton woods agreement
which intended to develop international financial cooperation by creating a convertible currency
system with set exchange rates the dollar was valued at 35 dollars per ounce of gold during
the time the imf supervisor system for instance a nation could adjust its currency rate by
up to 10 in any direction but significant changes needed imf's clearance furthermore the imf worked
as a gatekeeper meaning that nations could not join the international bank for reconstruction
and development or the ibrd a world bank forerunner founded by the bretton woods agreement
to finance europe's reconstruction after world war ii till they were representatives of the imf
the imf has favored floating exchange rate systems since the bretton woods system broke down
in the 1970s implying that market forces determined the relative worth of currencies
this system is still in effect today so what is the function of the imf quotas subscriptions
paid by member nations finance the international monetary fund the overall economy of each member
will determine the amount of each quota the quota in turn determines each nation's weight
inside the imf as well as the amount of imf money it is eligible for and its voting rights
special drawing rights or sdrs claims on imf members freely available currencies account
for 25 of each nation's quota and previously sdr's the breton woods system based on a fixed
exchange rate were believed to be inadequate resources to sustain global economic expansion
as a result the imf developed the sdrs in 1969 functioning as a worldwide reserve currency
they were created as a supplement to the international reserves of the period which
consisted of the u.s dollar in gold so what is the mission of the international monetary fund
the imf's primary mission is to maintain the international monetary system's
stability defined as the international payments and exchange rate system that allows nations and
their people to conduct business with one another activities of the international monetary fund
the imf gives loans to nations undergoing economic hardships to help them avoid or
reduce financial disasters the imf's primary instruments for attaining these objectives
are lending and capacity development monitoring let's take a closer look at lending
the imf grants loans to nations and economic distress to avert or overcome financial calamities
members contribute financial resources to a pool that is based on a quota system for these loans
capacity building the imf offers technical support policy advice and instruction to member countries
through its capacity development programs these programs comprise analytical and data gathering
training that leads to the imf's global and national economy monitoring program surveillance
the imf gathers massive data on the global economy international trade and the whole national
economy the organization also provides updated economic forecasts on a global and national scale
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