The International Monetary Fund's Advantages and Shortcomings Essay

The International Monetary Fund's Advantages and Shortcomings Essay

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The International Monetary Fund (IMF) is an organization of international that was started in 1944 at the Bretton Woods Conference and it officially was created by 29 members of countries on December 27, 1945. A fixed exchange rate system set up in Bretton Woods Agreement in which each country the IMF par value for the currency based on gold and the U.S. dollar. By reason of the dollar was fixed at $ 35 per ounce of gold, is also the same par value regardless of gold or dollars were used as basis. When the IMF moved to greater exchange-rate flexibility, the par values were also done away with it. The existence of economic stabilization program supported by the Fund, the IMF could provide a source other financing to countries that really need financial.
Funds raised from the IMF have two primary sources such as quotas and loans. Funds raised otherwise known as the countries have created most of the funds of the IMF. The size of the quota depends on the importance of the use of budgetary and fiscal policies in the world for example; the countries with the financial vitality of the greater also have a greater standard. An act to increase IMF resources is the development quota. The IMF has also raised funds for loans from countries other members. In fact, the IMF also have credit lines with other major industrial countries and Saudi Arabia.
IMF can work through three types. One of these is the surveillance which it involves monitoring the in terms of an economic and financial development, and was also monitoring in advising on policies aimed especially at crisis prevention. Since the dissolution of the Bretton Woods system of fixed exchange rates in the early 1970s, surveillance has expanded up largely through changes in procedure th...

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...e loan from the IMF has shown significant changes since the establishment of the IMF created. As time passed, the IMF has provided financial assistance to help the country deal with increased volatility of short-term trading to support adjustment and various balance of payments problems resulting from the terms of trade shocks, natural disasters, post-collision conditions, changes in the economic area, the eradication of poverty and economic development, restructuring of sovereign debt, and the banking and currency crisis of confidence driven.

Works Cited

(Biagio Bossone, May 2008) 2
IMF Surveillance: A Case Study on IMF Governance

Sharma, S. D. (2003), The Asian Financial Crisis: Crisis, Reform and Recovery,
(New York: Manchester University Press).

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