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

The planetary fiscal Fund (IMF) International Monetary Fund (IMF), supranational economic organization whose purpose is to promote outside(a) monetary cooperation to facilitate the expansion of world-wide trade. The IMF operates as a unite Nations specialized agency and is a permanent forum for consideration of issues of international payments, in which member nations are encouraged to maintain an orderly aim of exchange rates and to avoid restrictive exchange practices. The IMF was established along with the International Bank for Reconstruction and Development The IMFs Main Business macroeconomic and Financial Sector Policies In its oversight of member countries economic policies, the IMF looks primarily at the work outance of an economy as a wholeofttimes referred to as its macroeconomic performance. This comprises total expense (and its major components like consumer spending and business investment), output, employment, and inflation, as well as the countrys bal ance 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 concern of money and credit, and the exchange rateand financial sector policies, including the regulation and inspection of banks and other financial institutions. In addition, the IMF pays due attention to structural policies that motivate macroeconomic performanceincluding labor market policies that affect employment and lease behavior. The IMF advises each member on how its policies in these areas may be meliorate to allow the more effective pursuit of goals such as extravagantly employment, low inflation, and sustainable economic growththat is, growth that sight 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 monetary coo peration with 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 play thereby to the promotion and maintenance of high levels of employment and real income and to the schooling of the productive resources of al... ...the Poverty Reduction and Growth Facility 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 desirable practices for innate control procedures, financial reporting, and audit mechanisms. At the same time, the Executive visiting card decided to broaden the application, and make more systematic use, of the available tools to manage with countries that borrow from the IMF on the basis of erroneous information. In most cases, the IMF, when it lends, provides whole a small portion of a countrys external financing requirements. hardly because the approval of IMF lending signals that a countrys economic policies are on the rightly 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 come in its operations and especially in the credibility of the policy conditionality wedded to its lending.