International Monetary Fund

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International Monetary Fund

(IMF), specialized agency of the United Nations, established in 1945. It was planned at the Bretton Woods Conference (1944), and its headquarters are in Washington, D.C. There is close collaboration between it and the International Bank for Reconstruction and DevelopmentInternational Bank for Reconstruction and Development (IBRD)
(IBRD), independent specialized agency of the United Nations, with headquarters at Washington, D.C.; one of five closely associated development institutions (also including the International Center for Settlement of
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. Its primary mission is to ensure stability in the international monetary system. The IMF provides policy advice and financing to member countries with economic problems. The organization, using a fund subscribed by the member nations, purchases foreign currencies on application from its members so as to discharge international indebtedness and stabilize exchange rates. The IMF currency reserve units are called Special Drawing RightsSpecial Drawing Rights
(SDRs), type of international monetary reserve currency established (1968) by the International Monetary Fund (IMF). Created in response to worries concerning the limitations of gold and dollars as the sole means of settling international accounts, SDRs
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 (SDRs); from 1974 to 1980 the value of SDRs was based on the currencies of 16 leading trading nations. Since 1980 it has been reevaluated every five years and based on the relative international economic importance of the British pound sterling, Chinese yuan (added in 2016), the European Union euro (formerly the French franc and German mark), the Japanese yen, and the U.S. dollar. To facilitate international trade and reduce inequities in exchange, the fund has limited power to set the par value of currencies. Members are provided with technical assistance in making monetary transactions.

In 1995 the fund moved to increase disclosure requirements of countries borrowing money and at the same time created an emergency bailout fund for countries in financial crisis. IMF was criticized in 1998 for exacerbating the Asian financial crisis, through the fund's decision to require Asian nations to raise their interest rates to record levels. During the international financial crisis of the early 21st cent., the IMF provided loans and access to credit of more than $100 billion to developing countries that were affected by falling demand for their exports and other financial problems. IMF support and financing was also critical to financial rescue plans for several European Union members in the early 2010s. Changes effective in 2016 raised the status of the four major emerging market nations, Brazil, China, India, and Russia, including them among the IMF's top ten shareholders. The fund is ruled by a board of governors, with one representative from each nation. The board of governors elects an executive board of 24 representatives to direct regular operations; the executive board selects and is chaired by the managing director, who also heads the IMF's staff. There are 189 members in the IMF.

Bibliography

See studies by H. G. Grubel (1970), T. Agmon et al., ed. (1984); R. D. Hormats (1987), T. Ferguson (1988), E. P. McLellan, ed. (2002), D. Vines and C. L. Gilbert, ed. (2004), E. M. Truman, ed. (2006), G. Bird (2003), G. Bird and D. Rowlands, ed. (2 vol., 2007), and E. Conway (2015).

References in periodicals archive ?
The sources in the finance ministry said that the IMF and Pakistan had a difference of opinion on the issue of exact damage to the country's external sector in the past one year.
At the talks, Secretary Finance, Shahid Mahmood led the Pakistani team while the IMF team was led by Harald Finger.
The IMF family of standards, according to SMPTE, is maintained by its Media Packaging and Interchange Committee 35PM.
And for every dollar the United States contributes to the IMF and the multilateral development banks, other countries provide at least four dollars more, multiplying the impact of our contributions.
In a normal bailout procedure, the IMF acts as an impartial judge of the troubled country's debt sustainability; then, if it so chooses, it can step in as the lender of last resort.
The renewal of the IMF deal in 2008 would have meant that Erdoy-an would not have been able to squander public resources as if they were his own personal expense account and that he would have had difficulty moving billions of dollars in cash coming into the country unscreened.
On the other hand, the critics of the IMF define Fund's disadvantages saying despite its lofty status and commendable objective, the IMF is attempting to pull off a nearly impossible economic feat: perfectly timing and sizing economic intervention on an international scale.
In the process, many countries' balance-of-payments positions came under acute pressure, which required massive IMF financial assistance.
5bn to the IMF and it is due to repay the same sum across four payments in September.
Lagarde emphasised that IMF is a global multilateral institution where countries like India must have bigger say.
That perception was magnified when the IMF lent billions of dollars to euro zone countries in distress, including Greece, Ireland and Portugal, with loans that were much larger than the countries' economies.
The United States was instrumental in creating the IMF and is its largest financial contributor.