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

The multinational pecuniary entrepot (IMF) International Monetary Fund (IMF), international economic organization whose purpose is to promote international pecuniary cooperation to facilitate the expansion of international trade. The IMF operates as a United Nations narrow agency and is a permanent forum for consideration of issues of international payments, in which member nations are encouraged to maintain an orderly pattern of shift rates and to avoid restrictive exchange pr actuateices. The IMF was established along with the International Bank for Reconstruction and Development The IMFs Main Business Macroeconomic and fiscal 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 line investment), output, employment, and inflation, as well as the countrys balance of paymentsthat is, the balance of a countrys minutes with the rest of the world. The IMF foc parts mainly on a countrys macroeconomic policiesthat is, policies relating to the governments budget, the management of cash and credit, and the exchange rateand financial sector policies, including the regulation and supervision of banks and new(prenominal) 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 distributively member on how its policies in these areas may be improved to chuck up the sponge the more effective pursuit of goals such as high employment, minor inflation, and sustainable economic growththat is, growth that can be continue without leading to such difficulties as inflation and balance of payments problems.The IMFs PurposesThe purposes of the International Monetary Fund arei. To p romote international pecuniary cooperation through a permanent institution which provides the machinery for consultation and collaboration on international monetary problems. ii. To facilitate the expansion and balanced 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 rich resources of al... ...the Poverty Reduction and Growth Facility pay a concessional firm 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 desirable practices for internal statement 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 deal with countries that embrace from the IMF on the basis of erroneous information. In most cases, the IMF, w hen it lends, provides only a small portion of a countrys external financing requirements. But because the adulation of IMF lending signals that a countrys economic policies are on the right track, it reassures investors and the formalized 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 especially in the credibility of the policy conditionality attached to its lending.