The main features of the international monetary fund and its importance
International monetary fund program
There were two views on the role the IMF should assume as a global economic institution. In , the terms for their cooperation were set out in a concordat to ensure effective collaboration in areas of shared responsibility. The result is an institution that is more in tune with the needs of its member countries. Developing countries suffer from chronic BOP problems which could not be remedied in the short run. Financial Structure of the IMF: The capital or the resources of the Fund come from two sources: i Subscription or quota of the member nations, and ii Borrowings. Floating exchange rate system thus introduced caused severe hardships to the LDCs. The distinguishing features of the Fund loans are their cost and certain macroeconomic policy conditions. Rescue packages were launched by the IMF under strong authority conditions. The IMF regularly conducts general reviews of quotas. However, stricter rules were imposed on governments that applied to the IMF for funding. Critics of the IMF maintain that it intervenes either too much or too little, and that its policies can create moral hazard.
The programme design involves monetary and fiscal policy measures so that structural adjustment i. Much of the criticism centers on the IMF's requirements to adopt certain economic policies in order to receive IMF loanswhich may encourage poor countries to neglect social concerns in order to comply.
Under the plan, Fund and Bank country teams discuss their country-level work programs, which identify macroeconomic and sectoral issues, the division of labor, and the work needed in the coming year. The IMF makes loans to countries that are experiencing economic distress in order to prevent or mitigate financial crises.
At the time of formation of the IMF, the quota of each member was made up of 25 p. In compliance with the IMF demand, in Argentina duringemployment in public administration was down by The representatives of 45 governments met at the Bretton Woods Conference in the Mount Washington Hotel in Bretton Woods, New Hampshirein the United States, to discuss a framework for postwar international economic co-operation and how to rebuild Europe.
The framers of the new Bretton Woods monetary regime hoped to promote world tradeinvestmentand economic growth by maintaining convertible currencies at stable exchange rates.
based on 94 review