Established : 1945
Headquarter : Washington, D.C
The International Monetary Fund (IMF) is an organization of 190 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. Created in 1945, the IMF is governed by and accountable to the member. 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 to transact with each other.
The IMF’s fundamental mission is to ensure the stability of the international monetary system. It does so in three ways:
The IMF provides loans to member countries experiencing actual or potential balance of payments problems to help them rebuild their international reserves, stabilize their currencies, continue paying for imports, and restore conditions for strong economic growth, while correcting underlying problems.
Quota subscriptions are a central component of the IMF’s financial resources. Each member country of the IMF is assigned a quota, based broadly on its relative position in the world economy.
Special Drawing Rights (SDR)
The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves. The value of a SDR is based on a basket of key international currencies reviewed by IMF every five years. The weights assigned to each currency in the basket are adjusted in terms of international trade and national foreign exchange reserves. In 2015 the IMF decided to add the Renminbi (Chinese yuan) to the basket with effective from 2016. Since the basket has consisted of the following five currencies:
Voting power in the IMF is based on a quota system. Each member has a number of basic votes (each member's number of basic votes equals 5.502% of the total votes), plus one additional vote for each special drawing right (SDR) of 100,000 of a member country's quota.
Board of Governors
The Board of Governors consists of one governor and one alternate governor for each member country. Each member country appoints its two governors. The governor is appointed by the member country and is usually the minister of finance or the governor of the central bank. All powers of the IMF are vested in the Board of Governors. The Board normally meets once a year and is responsible for electing executive director to the Executive Board. While the Board of Governors is officially responsible for approving quota increases, special drawing right allocations, the admittance of new members etc.
The Executive Board (the Board) is responsible for conducting the day-to-day business of the IMF. It is composed of 24 Directors, who are elected by member countries or by groups of countries, and the Managing Director, who serves as its Chairman.