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IMF is considered as the foster cooperation of the global monetary fund and secures the stability of the financial condition. The IMF is facilitating the international trading process and promoting high and sustainable economic growth along with employment. IMF also indulges its cooperation in the reduction of global poverty with employment. The IMF has come into consideration since 1945 with 29 member countries along with the mission to reshape the international monetary system. This study is going to discuss the function and importance of the IMF in the monetary system.
IMF Full form
Full form of the IMF is an international monetary system. This institute is a foster agency of the United States for the reconstruction of the monetary system. It has been established in the year 1944 and started its action from the year 1945 as an advisory committee on the global economy.
The IMF has been involved in different monetary programs and its mission has been reflected to generate employment around the world. It has played a central role in the balance of payment management and solves the critical areas. It also manages the international financial crisis with an intensive management service.
IMF is involved in the funding and activities of the financial programs such as gathering statistical data and surveillance on the economic members. The IMF works on the improvement of the economic condition of the member countries. The fund of the IMF comes from two major sources: quotas and loans. The size of the quota depends on the financial importance of the member country.
The current director or chairwoman of the IMF is Kristalina Georgieva of Bulgaria. She is in the post from 2019 and works as an economic advisor for the member countries.
Functions of IMF
The IMF plays an important role in the economic stability and transforms the growth of the international economy by working on the development poverty level. The macroeconomic stability depends on the achievement of poverty. There have been different functions that IMF upholds in their actions.
- IMF includes their role in surveillance, financial assistance and technical assistance for the member countries. It is promoting the financial stability of the poor country with more employment.
- It is also fostering 190 countries’ financial conditions and helps to secure the stability of economic growth and success.
- The IMF is highly promoting the growth of employment along with the international trading concept.
- The role of the IMF is to alter the exchange rates by the floating system. It helps to shift the economic policies of different countries and manage their exchange rates.
- IMF also negotiates in terms of loans under the segment of conditionality policy which gets has been established in the year 1950. This helps low-income countries to borrow loans for financial growth.
Importance of IMF in the Global Economy
IMF is a monetary institution that promotes the stability of the global economy along with growth and global trading policies. This institution is helping their member countries in times of financial crisis by providing access to quotas and loans. They provide assistance on advanced technologies and monitor the economic policies of different countries. IMF is independently working on the poverty issues of their member and helping them to overcome the crisis. Developing countries can borrow on the term of the concession for their financial development process. IMF also identifies the possible risks and provides recommendations for financial stability. They identify the risks of a stable economic condition and advise governments for a suitable solution for the member countries. With the step of risk identification, IMF secures the stability of the economy. With their actions, IMF reduces the poverty around the world and increases employment status. High employment enriches the economic condition of a nation and leads to growth and success. IMF is accessing the information on the policies of the economy and provides opportunities to influence the member unions. Financial support intensely reduces the payment difficulties in international trade.
Conclusion
It can be concluded that IMF is an important term in the global economy. IMF provides different actions and controls on the economic growth and sustained with poverty factors. On the other hand, it also provides the identification of economic risk that becomes a crisis for the economic development process. They provide recommendations on the risk mitigation process along with supplementary options. IMF helps developing countries by loans and quotas to depreciate their financial condition. Their access helps to overcome a diplomatic situation in a stable situation. Low-income countries find a space of appreciation with the help of the IMF.
