The International Monetary Fund (IMF) Essay -- International Economics

The International Monetary Fund (IMF) International Monetary Fund (IMF), international economic organization whose purpose is to promote international monetary cooperation to comfort the expansion of international trade. The IMF operates as a United Nations specialized agency and is a permanent forum for consideration of issues of international payments, in which member nations argon encouraged to maintain an orderly pattern of exchange rates and to avoid restrictive exchange practices. The IMF was established along with the International Bank for Reconstruction and maturation The IMFs Main Business Macroeconomic and Financial Sector Policies In its oversight of member countries economic policies, the IMF looks mainly at the performance of an economy as a wholeoften referred to as its macroeconomic performance. This comprises total spending (and its major components like consumer spending and business investment), output, employment, and inflation, as well as the countrys relaxation of paymentsthat is, the balance of a countrys transactions with the rest of the world. The IMF focuses mainly on a countrys macroeconomic policiesthat is, policies relating to the governments budget, the management of money and credit, and the exchange rateand financial sector policies, including the regulation and oversight of banks and other financial institutions. In addition, the IMF pays due attention to structural policies that affect macroeconomic performanceincluding labor market policies that affect employment and wage behavior. The IMF advises individually member on how its policies in these atomic number 18as may be improved to allow the more effective pursuit of goals such as high employment, low inflation, and sustainable economic growththat is, growth that can be sustained without leading to such difficulties as inflation and balance of payments problems.The IMFs PurposesThe purposes of the International Monetary Fund arei. To promote international mo netary cooperation through a permanent institution which provides the machinery for consultation and collaboration on international monetary problems. ii. To facilitate the expansion and equilibrate growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of al... ...the Poverty Reduction and Growth adeptness pay a concessional fixed interest rate of percent a year. To strengthen safeguards on members use of IMF resources, in March 2000 the IMF began requiring assessments of central banks compliance with suited practices for internal control procedures, financial reporting, and audit mechanisms. At the same time, the Executive Board decided to broaden the application, and make more systematic use, of the available tools to commode with countries that borrow from the IMF on the basis of erroneous information. In most cases, the IMF, when it lends, pro vides only a small portion of a countrys external financing requirements. But because the panegyric of IMF lending signals that a countrys economic policies are on the right track, it reassures investors and the official community and helps generate additional financing from these sources. Thus, IMF financing can act as an important lever, or catalyst, for attracting other funds. The IMFs ability to perform this catalytic role is based on the confidence that other lenders have in its operations and specially in the credibility of the policy conditionality attached to its lending.