1.1 What is the International Monetary Fund (IMF)?
“The International Monetary Fund is an organisation that provides short-term credit to 186 member nations. The International Monetary Fund works to maintain orderly payments arrangements between countries and to promote growth of the world economy without inflation. It supports free trade in goods and services. To stabilize its members’ economies, the IMF provides policy advice and short-term loans when a member nation encounters financial difficulty.”
World Book, Inc
1.2 The history of the International Monetary Fund (IMF).
The International Monetary Fund was designed during World War II by men whose
worldview had been shaped by the Great War and the Great Depression. Their views on how the post-war international monetary system should function were also shaped by their economics training and their nationalities. To prevent a reoccurrence of monetary and financial instability, the Conference established the International Monetary Fund (IMF). The IMF started in July 1944, when 45 governments and their representatives held a meeting in the town of Bretton Woods, New Hampshire, in the North Eastern United States, they agreed on a framework for international economic cooperation.
As result to the meeting they draft a charter of an international institution to oversee the international monetary system and to promote both the elimination of exchange restrictions relating to trade in goods and services, and the stability of exchange rates. The main role of the IMF was to stabilize the exchange rate, prevent crisis, and resolution of crisis.
After the IMF began functioning as an institution, its evolution was similarly driven by a combination of political even...
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...cies for these new situations had to be adapted quickly, and yet many elements of the old doctrine survived, dinosaurs at times, at odds with the new reality of these external crises confronting the developing economies.
1. Bannock,G. Davis,E.etl. The New Penguin Business Dictionary. 2002. Strand:London. Pg 267.
2. Boughton, James M. The IMF and the Force of History: Ten Events and Ten Ideas that Have Shaped the Institution.2004. http://www.imf.org [Web Accessed: 27 April 2010].
3. Fetzer,S. Company. The World Book Encyclopedia: I volume 10. United States of America. 2001.
4. Frenkel, R. Current problems with the IMF: Briefing paper. 2007. http://library.fes.de [Web Accessed: 27 April 2010].
5. Fundamental Disequilibrium:Role in Balance-of-payments Accounting. Britanica-eb.com. http://www.britannica.com [Web Accessed: 26 April 2010].
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