International Monetary Fund (IMF): came into existence in 1945 with an aim to evolve an orderly international monetary system, i.e., facilitating system of international payments and adjustments in exchange rates among national currencies. Its headquarters is located in Washington DC. In 2005, it had 191 countries as its members.
Major Objectives of IMF
1. To promote international monetary cooperation through a permanent institution.
2. To facilitate expansion of balanced growth of international trade and to contribute thereby to the promotion and maintenance of high levels of employment and real income.
3. To promote exchange stability with a view to maintain orderly exchange arrangements among member countries.
4. To assist in the establishment of a multilateral system of payments in respect of current transactions between members.
Functions of IMF
1. Acting as a short-term credit institution.
2. Providing machinery for the orderly adjustment of exchange rates.
3. Acting as a reservoir of the currencies of all the member countries, from which a borrower nation can borrow the currency of other nations.
4. Acting as a lending institution of foreign currency and current transaction.
5. Determining the value of a country’s currency and altering it, if needed, so as to bring about an orderly adjustment of exchange rates of member countries.
6. Providing machinery for international consultations.
