International Monetary Fund (IMF) is a Winner of the 2016/2017 Global Sustainable Development Award and Accredited as a Global 500 Sustainable Development Agencies of the year 2016/2017 in appreciation of its contribution towards social-economic development of the world and its contribution towards attainment of United Nations Sustainable Development Goals. Recognised for fostering Global Monetary Cooperation, Securing financial stability, facilitating international trade, promoting high employment and sustainable economic growth, and reducing poverty around the world..Awarded and Accredited by Public Opinions International (Uganda-East Africa) AND Organisation for International Friends of Africa (OIFA).
Public Opinions International is a Partner and Member of International Organisation for Educational Development (IOED)andInternational Police Commission which is is duly registered as an international Non-Profit, Non-Secretarial, Peacekeeping and Social Development Paramilitary Organization based in the State of California, United States of America with extension commands in member nations of the U.N.The International Police Commission has also been given the Consultative Status from the UN ECOSOC and it is also a Member of the United Nations Office of the Drugs and Crimes “UNODC
The IMF, also known as the Fund, was conceived at a UN conference in Bretton Woods, New Hampshire, United States, in July 1944. The 44 countries at that conference sought to build a framework for economic cooperation to avoid a repetition of the competitive devaluations that had contributed to the Great Depression of the 1930s.
The IMF’s responsibilities: The IMF’s primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other. The Fund’s mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on global stability.
The International Monetary Fund (IMF) is an organisation of 187 countries that works to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty. As of March 2011, the IMF had $111.8 billion in loans outstanding to 87 countries. Of this, $7.7 billion was on concessional terms to 65 countries.
Fast Facts
The IMF Articles of Agreement were drawn up at the Bretton Woods Conference in 1944. Membership is open to all countries. Ratification of the articles and acceptance of conditions laid down by the Fund are conditions of membership. The purposes of the Fund are to:
- Promote international monetary cooperation through consultation and collaboration
- Facilitate the expansion and balanced growth of international trade, and thereby contribute to the promotion and maintenance of high levels of employment and real income
- Promote exchange stability and orderly exchange arrangements
- Assist in the establishment of a multilateral system of payments and the elimination of foreign exchange restrictions
- Assist members through the temporary provision of financial resources to correct maladjustments in their balance of payments.
The articles have been amended six times, in 1969, 1978, 1992, 2009 and twice in 2011. The first amendment provided for the creation and allocation of SDRs. The second amendment implemented a review of the Fund’s responsibilities and operations that was conducted from 1972 to 1976 following the collapse of the fixed exchange rate system. The third empowers
the Fund to suspend the voting and certain related rights of a member who fails to fulfil any of the obligations under the articles, other than obligations with respect to SDRs.
The fourth amendment was to provide for a special one-time allocation of SDRs so as to equalise members’ ratio of cumulative allocations to their ninth review quotas. Amendments proposed in 2008 entered into effect in February and March 2011.
The first expanded the IMP’s investment authority, allowing the IMF a wider range of income sources than the previous reliance primarily on lending to member countries.
The second strengthened the representation of emerging market and developing economies in the IMF and enhanced the voice and participation of low-income countries. Fifty-four countries received quota increases totalling around $33 billion.
In November 2010, the IMF agreed wide-ranging governance reforms to reflect the increasing importance of emerging market countries while protecting the voting shares of smaller developing countries in the Fund. The proposal was for a doubling of total quotas to about $756 billion, and for more than 6 percent of quota shares to shift to dynamic emerging market and developing countries and more than 6 percent from over-represented to under-represented countries in the Fund. The proposals would also lead to a more representative, all-elected executive board.
Each member has an assessed quota that is subscribed and determines voting power. Access to use of the Fund’s resources is also determined in relation to quota, taking account of the member’s balance of payments need and the strength of the policies it agrees to implement to restore balance of payments viability. The total of members’ quotas, as of April2011, was about $384 billion.
Members may draw on non-concessional terms from the general resources of the Fund, which are derived from quota subscriptions, under credit tranches (of 25 percent of quota each). Drawings (or ‘purchases’) in the upper credit tranches – in other words, beyond the first credit tranche – are subject to the terms of a stand-by arrangement agreed with the member. This arrangement specifies the precise economic policy conditions that the member must meet to qualify for each purchase, and the scheduling of purchases.
Stand-by arrangements usually cover a 12- to 18-month period, but may be as long as three years. Members are expected to meet their repurchase expectations, but the Fund may extend them on request if the Executive Board agrees that the member’s external position is not sufficiently strong for it to repay early without undue hardship or risk.
There is also an Extended Fund Facility under which members with structural maladjustments and experiencing balance of payments difficulties can enter into extended arrangements for up to 36 months. These can be in amounts larger than is possible under the credit tranches.
A Flexible Credit Line (FCL) was announced on 24 March 2009, and subsequently expanded in August 2010, to address actual or potential balance of payments needs for countries with strong fundamentals, policies and track records of policy implementation. Countries seeking to use the FCL need to meet a set of up-front criteria, rather than facing ex-post or ongoing conditions. Having met the up-front criteria, a country then has the choice of drawing on the credit line at any time or to treat it as a precautionary instrument.
At the time the FCL was expanded, a Precautionary Credit Line (PCL) was added to the toolkit for countries with sound fundamentals and policy track records but that face moderate vulnerabilities preventing them from meeting the high FCL qualification standards. The PCL combines some Up-front criteria with ex-post conditions that focus on the vulnerabilities identified.
At the same time as the FCL was introduced, the Fund announced an enhanced framework for its Stand-By Arrangements (SBA). The enhanced framework allows countries ineligible for the FCL to have high access to the SBA funds on a precautionary basis, allows frontloading of access, reduces the frequency of reviews and provides greater flexibility for country-specific circumstances in determining the programme for reviews.
In September 1999, a new Poverty Reduction and Growth Facility (PRGF) replaced and strengthened the IMP’s concessional lending under the former Enhanced Structural Adjustment Facility (ESAF). The ESAF had provided concessional loans to qualifying low-income countries, aimed at strengthening balance of payments and fostering growth.
The PRGF has broadened this initiative to explicitly include lasting poverty reduction as well as to encourage sustainable growth. The PRGF provides a vehicle for integrating mutually reinforcing macroeconomic, structural and social policies, and is geared much more towards using social indicators to measure progress.
Under the PRGF, low-income countries may borrow on concessional terms through three main facilities:
The Extended Credit Facility, which is designed to provide medium-term support to address protracted balance of payments problems;
The Standby Credit Facility (SCF), which addresses short-term balance of payments needs and includes an option to use
the SCF on a precautionary basis;
The Rapid Credit Facility (RCF), which is for emergency assistance with limited conditionality in the event of an urgent balance of payments need. These changes were agreed in tandem with commitments to enhance the Heavily Indebted Poor Countries (HIPCs) initiative.
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