The International Monetary Fund (IMF)
Q – What is the purpose of the International Monetary Fund?
A – The International Monetary Fund (IMF) primary purpose is to ensure the stability of the system of exchange rates and international payments that enable countries to transact with each other.
Q – When was the International Monetary Fund founded?
A – The International Monetary Fund was founded in July 1944 at a United Nations conference organized in Bretton Woods, New Hampshire, United States. The IMF was established to avoid crisis such as the 1930s Great Depression and came into formal existence in December 1945 when the first 29 member countries signed the articles of agreement. The IMF started operations in March 1947 and has an independent governance and structure.
Q – How many member countries does the International Monetary Fund have?
A – The International Monetary Fund has 189 member countries and is a separate body of the United Nations (UN) with headquarters in Washington D.C, and 2,700 employees from 148 countries.
Q – What where the original aims of the International Monetary Fund?
A – The original aims of the International Monetary Fund were to promote cooperation on international monetary problems, facilitate the expansion and balanced growth of international trade, promote exchange rate stability, assist in the establishment of a multilateral system of payments and lend resources to countries facing balance of payment difficulties.
Q – What are the core competencies of the International Monetary Fund?
A – The International Monetary Fund core competencies are surveillance, financial assistance, and capacity development. On surveillance, the IMF advises member countries and encourages economic and financial policies; on financial assistance, the IMF provides interest-free loans to help members with payment problems; on capacity development, the IMF provides technical support and training to assist member countries to design and implement economic policies.
Q – Where do the International Monetary Fund resources come from?
A – The International Monetary Fund resources come from the 668 billion US dollars provided by members’ countries quotas contribution. Likewise, the IMF can complement its resources by borrowing agreements with other members’ countries that have additional funds.
Q – What is the governance of the International Monetary Fund?
A – The International Monetary Fund is governed by countries members and their representatives. Each country governor and temporary substitute participate in the Board of Governor which approves new amendments, resources allocations, and admissions and withdrawals of members with votes from each country. Besides, the IMF has an Executive Board of 24 directors that represent groups of countries and analyze members’ economic issues. Additionally, Christine Lagarde, from France, acts as managing director of the IMF and as chairman of the Executive Board.
Q – Who determines the share and voting power of each country?
A – The share and voting power of each country are determined by the IMF in agreement with members’ countries governments. According to the quotas paid by each country, the IMF assigns a voting power percentage proportional to the contributions.