International Monetary Fund (IMF)

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Context

The International Monetary Fund (IMF) cut its forecast for India’s economic growth to 6.8 per cent in 2022 — sharply down from its earlier projection of 7.4 per cent in July.

History of IMF

The IMF, also known as the Fund, was conceived at a UN conference in Bretton Woods, New Hampshire, United States, in July 1944.
Countries were not eligible for membership in the International Bank for Reconstruction and Development (IBRD) unless they were members of the IMF.
IMF, as per Bretton Woods agreement to encourage international financial cooperation, introduced a system of convertible currencies at fixed exchange rates, and replaced gold with the U.S. dollar (gold at $35 per ounce) for official reserve.

Role of IMF

IMF focuses on fostering global monetary cooperation, securing financial stability, facilitating and promoting international trade, employment, and economic growth around the world.
The IMF is a specialized agency of the United Nations.

Functions of IMF

Regulatory functions: IMF functions as a regulatory body and as per the rules of the Articles of Agreement, it also focuses on administering a code of conduct for exchange rate policies and restrictions on payments for current account transactions.
Financial functions: IMF provides financial support and resources to the member countries to meet short term and medium term Balance of Payments (BOP) disequilibrium.
Consultative functions:IMF is a center for international cooperation for the member countries. It also acts as a source of counsel and technical assistance.

IMF Quota

IMF funds come from two major sources – Quota and Loans.
Quotas which are pooled funds of member nations, generate most IMF funds.
The size of a member’s quota depends on its economic and financial importance in the world.
Nations with larger economic importance have larger quotas.
The quotas are increased periodically as a means of boosting the IMF resources in the form of Special Drawing Rights.

Organization structure of IMF

Structure of the International Monetary Fund (IMF)
Governing Bodies of IMF	Roles and Responsibilities
Board of Governors	· Each governor of the Board of Governors is appointed by his/her respective member country. · Elects or appoints executive directors to the Executive Board. · Board of Governors is advised by the International Monetary and Financial Committee (IMFC) and the Development Committee. · An annual meet up between the Board of Governors and the World Bank Group is conducted during the IMF–World Bank Annual Meetings to discuss the work of their respective institutions.
Ministerial Committees 1. International Monetary and Financial Committee (IMFC) 2. Development Committee	· It manages the international monetary and financial system. · Amendment of the Articles of Agreement. · To solve the issues in the developing countries that are related to economic development.
Executive Board	· It is a 24-member board that discusses all the aspects of the Funds. · The Board normally makes decisions based on consensus, but sometimes formal votes are taken.

Reports Published

Global Financial Stability Report
World Economic Outlook: it is usually published twice a year in the months of April and October.
Fiscal Monitor (FM)