What is the Full form of IMF?
The full form of IMF is the International Monetary Fund. It was founded in July 1944 as an international organisation to promote global economic development, financial cooperation, economic security, international trade & poverty reduction across the globe. A board of directors manages the IMF, all of whom represent one of the organisation’s members nations. It is based in Washington, D.C., and has approximately 190 participating countries.
The IMF’s primary goal is to design a stable international financial system, a stable system of currency exchange rates and international payments so that countries can make transactions with one another. In three different ways, it does this:
- Keeps a record of the global markets and member countries’ economies
- Lending to countries facing problems with the balance of payments
- Providing representatives with practical support
- Lending to countries that face problems with the balance of trade
- Providing members with practical support
- The mandate was revised in 2012 to cover all macroeconomic & financial sector problems impacting global sustainability.
Duties of the IMF
- To preserve exchange stability, it can prevent fluctuations in the exchange rate.
- It enables member countries to mitigate the balance-of-payments deficit by lending or selling foreign currencies to participants.
- If there are fundamental changes in the economies of its representatives, it may encourage its members to adjust the par value of its currencies.
- It offers economic and monetary-related recommendations to member countries to help them stabilise their economies.
- It may designate a currency as a scarce currency in high demand. It may raise its availability by borrowing it from or purchasing it in exchange for gold from the country concerned.
- It enables members to borrow in exchange for their own currencies from the IMF. By repaying loans in convertible currencies, the borrowing nations are forced to buy back their currencies.
- It offers participating countries with technical assistance. It provides its specialists & experts with resources or can send external experts to provide the Member States with technical support.