INTERNATIONAL
MONETARY
FUND
Group Members
1. Lajvanty Raja
2. Madiha
INTRODUCTIO
N
What is IMF ?
The International Monetary Fund (IMF) works to achieve sustainable growth
and prosperity for all of its 190 member countries. It does so by supporting
economic policies that promote financial stability and monetary cooperation,
which are essential to increase productivity, job creation, and economic well-
being. The IMF is governed by and accountable to its member countries.
The IMF has three critical missions: furthering international monetary
cooperation, encouraging the expansion of trade and economic growth, and
discouraging policies that would harm prosperity. To fulfill these missions,
IMF member countries work collaboratively with each other and with other
international bodies.
IMF History
The International Monetary Fund (IMF) was formed in 1944 at the
Bretton Woods Conference in New Hampshire, United States.
The 44 founding member countries sought to build a framework for
international economic cooperation to avoid a repeat of the Great
Depression.
Who was it formed by?
The IMF was founded by John Manard Keynes and Harry Dexter
White.
IMF MISSION
IMF MISSION
The IMF's original mission was to help countries stabilize their currencies and
promote international trade. It did this by providing loans to countries in financial
trouble and by setting rules for exchange rates.
The IMF's role changed significantly in the 1970s, when the Bretton Woods
system of fixed exchange rates collapsed. The IMF began to focus more on
providing loans to countries in debt and on helping countries to implement
economic reforms.
STRUCTURE
OF THE IMF
Board of Governors
This is the highest decision-making body of the IMF. Each member country
appoints a Governor, typically its Finance Minister or Central Bank Governor.
They meet once a year to discuss important matters.
Executive Board
This board is responsible for day-to-day operations and decisions. It consists of
24 Executive Directors who represent member countries or groups of countries.
The Managing Director is the head of the Executive Board.
Managing Director
The Managing Director is like the CEO of the IMF. They are responsible for
managing the IMF's work and implementing its policies. The Managing Director
is appointed by the Executive Board.
IMF Staff
A team of economists, financial experts, and professionals who work on various
projects, research, and assistance programs to help member countries.
IMF
GOVERNANCE
Leadership
The IMF is led by a Managing Director, who is head of the staff and Chairman of
the Executive Board. The Managing Director is assisted by a First Deputy
Managing Director and three other Deputy Managing Directors. The
Management team oversees the work of the staff and maintains high-level
contacts with member governments, the media, non- governmental organizations,
think tanks, and other institutions
Decision Making Process
The International Monetary Fund (IMF) makes decisions through a weighted
voting system, where member countries' voting power is determined by their
financial contributions (quotas). Major decisions often require a supermajority
vote, such as 85% of total voting power, to pass. Consensus-building and
informal negotiations among member countries play a crucial role in reaching
decisions within the IMF.
Member Countries
As of June 2023, there are 190 member countries of the International Monetary Fund
(IMF). These countries are located on all continents except Antarctica.
The five largest IMF members in terms of quota are:
United States
China
Japan
Germany
France
Voting Rights
IMF voting rights are based on a country's quota.
Each member country has one vote for every SDR 100,000 of its quota.
The United States has the largest quota and the most voting power in the IMF,
with 36.09% of the total votes.
China is the second largest IMF member, with 6.41% of the total votes.
The IMF's voting system is designed to ensure that the largest and most
important economies have a greater say in the IMF's decision-making process.
Overview
Membership : 190 Countries
Headquarters : Washington, D.C. 20431 United States
Executive Board : 24 Executive Directors who represent the IMF's member
countries or groups of countries
Staff : 2,700 staff members
Total Quotas : $476 billion (about $639.9 billion)
Biggest Borrowers : Argentina, Ukraine, Pakistan, Egypt, Greece
IMF
FUNCTIONS
The IMF’s Main Functions
Surveillance and Financial Technical Assistance and
Economic Analysis Assistance Capacity Building
21
Surveillance and Economic Analysis
The IMF monitors the global economy and the economies of its
member countries. It provides regular assessments and analysis of
economic trends, exchange rates, fiscal policies, and other relevant
factors that could impact the stability of member countries and the
global economy. This surveillance helps identify potential
vulnerabilities and provides recommendations to address economic
imbalances or risks.
Financial Assistance
The IMF offers financial support to member countries facing balance of
payments problems, which can arise from issues such as trade deficits or capital
outflows. This assistance helps stabilize the countries' economies and provides
them with time to implement necessary reforms to address the underlying issues
causing the imbalance. The financial assistance can come with conditions that
require the country to undertake specific policy measures to restore economic
stability.
Technical Assistance and Capacity Building
The IMF provides technical expertise and knowledge to member countries to
enhance their economic management capabilities. This includes assisting
countries in designing and implementing effective monetary policies, fiscal
policies, and structural reforms. The goal is to help countries build stronger
institutions, improve governance, and develop sound economic policies that
contribute to sustainable growth and stability. These three functions collectively
enable the IMF to promote international monetary cooperation, financial stability,
and sustainable economic growth among its member countries.
What are IMF Quotas ?
Quotas are the building blocks of the IMF’s financial and governance structure. An
individual member country’s quota broadly reflects its relative position in the world
economy. Quotas are denominated in Special Drawing Rights (SDRs), the IMF’s unit of
account.
Special Drawing Rights
The SDR is an international reserve asset created by the IMF to supplement the official
reserves of its member countries.
The SDR is not a currency. It is a potential claim on the freely usable currencies of IMF
members. As such, SDRs can provide a country with liquidity.
A basket of currencies defines the SDR: the US dollar, Euro, Chinese Yuan, Japanese
Yen, and the British Pound.
When can a country borrow from the IMF?
A member country may request IMF financial assistance if it has a balance of payments
need when it cannot find sufficient financing on affordable terms to meet its net
international payments. An IMF loan eases the adjustment policies and reforms that a
country must make to correct its balance of payments problem and restore conditions for
strong economic growth.
PAKISTAN &
IMF
RELATION
Pakistan and IMF Relation
The International Monetary Fund (IMF) and Pakistan have a long and
complex relationship. Pakistan has been a member of the IMF since 1950, and
has received IMF loans 22 times, most recently in 2023.
The IMF's most recent loan to Pakistan is a $3 billion Stand-By Arrangement
(SBA). The SBA is designed to help Pakistan stabilize its economy and
address its balance of payments deficit. The SBA is conditional on Pakistan
implementing a series of economic reforms.
CONCLUSION
Conclusion
The International Monetary Fund (IMF) holds a significant influence in the global
economy through its functions, structure, and impact on member countries. By providing
financial assistance, policy advice, and promoting cooperation, the IMF continues to play
a crucial role in ensuring stability and sustainable economic growth worldwide.
THANK YOU
