IMF International Monetary Fund ( Important for all exams)

International Monetary Fund 

Created in 1945, the IMF is governed by and accountable to the 189 countries that make up its near-global membership.The International Monetary Fund (IMF) is an organization of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.The IMF's primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other. The Fund's mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on global stability.The International Monetary Fund (IMF) and the International Reconstruction and Development Bank (IBRD) were established in July 1944 together on the basis of Bretton Woods conference that is why they are also known as the Bretton Woods twins. India is the founding member of the IMF.The International Monetary Fund or the IMF is a global organization with its headquarters at Washington, D.C. to promote international monetary cooperation, enable international trade, achieve financial stability, stimulate high employment, diminish poverty in the world and sustain economic growth. IMF was formed at the Bretton Woods Conference in 1944 and it was formally established a year later. Initially, there were 29 countries with a goal of redoing the global payment system. Today, the organization has 189 members.The IMF offers policy advice and financing to its members and works with developing countries to assist them in attaining macroeconomic stability and overcoming poverty. The logic for this is that private global capital markets operate imperfectly and many nations do not have enough access to financial market.

Functions

To ensure exchange rate stability, grant economic assistance to members countries for eliminating the adverse balance of payment, minimize the imbalances in quantum and duration of international trade, ensure balanced international trade and promote international monetary co-operation.

Main executive board structure

Executive directors are representing around 189 countries. Every member country nominates 2 governor for attending the meetings of Board of Governors. Generally the Finance Minister of the member country is the governor at the IMF meetings but in his absence Governor of the Central Bank represents the seat. And 24 Directors each representing a single country or groups of countries.Staffs are Approximately 2,700 from 150 countries.

IMF's Governance and organization

The IMF is accountable to the governments of its member countries. At the top of its organizational structure is the Board of Governors, which consists of one Governor and one Alternate Governor from each member country. The Board of Governors meets once each year at the IMF-World Bank Annual Meetings. Twenty-four of the Governors sit on the International Monetary and Financial Committee (IMFC) and normally meet twice each year.
The value of SDR is determined by the basket of 5 currencies i.e. Euro, US Dollar, Yen, Chinese Yuan, Pound Sterling. Chinese Yuan was introduced as the 5th currency in the SDR basket in Oct. 2016, US dollar has highest weightage (41.73%) in deciding the value of SDR followed by the Euro (30.93%) and Largest borrowers are Greece, Ukraine, Pakistan and Egypt.
The Extended Fund Facility is used to help countries address balance of payments difficulties related partly to structural problems that may take longer to correct than macroeconomic imbalances.
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