The IMF, or the International Monetary Fund, came into existence in 1945 with the objective of establishing a healthy and orderly monetary system. It aimed at facilitating a system of international payments and taking care of the adjustments in exchange rates among national currencies. It is one of the three international institutions—the other two being the World Bank and the International Trade Organization—that were created for facilitating and monitoring the economic development of the world.
Objectives of the IMF
1. To aid the balanced growth of international trade and market, thereby promoting the growth of employment and income;
2. To promote international monetary cooperation among the member countries;
3. To facilitate the orderly exchange of goods between the member countries;
4. To facilitate international payments with respect to the exchange transactions between the member countries.
Functions of the IMF
1. Providing short-term credit to member countries;
2. Maintaining stability in the exchange rate of the member countries;
3. Fixing and altering the value of a country’s currency whenever required, to facilitate the adjustment of exchange rate of member countries;
4. Collecting the currencies of member countries so as to allow them to borrow the currency of other nations;
5. Lending foreign currency to member nations and facilitating international payments with respect to the exchange transactions between member countries.