Objectives of the International Monetary Fund
The International Monetary Fund was established in 1945 after its conception in 1944. Currently, the IMF has 184 member states. The main aim of the establishment of the International Monetary Fund was to promote and maintain monetary corporation internationally, exchange stability, orderliness in exchange arrangements and economic growth.
The IMF was also established to ensure high employment levels while providing temporary monetary or financial assistance to member countries in order to ease adjustments in the balance of payments. Objectives of the International Monetary Fund can be summarized in two phrases.
- To achieve international advantages of gold standards without member countries being subjected to their internal disadvantages
- To achieve the internal advantages of proper standards and avoiding international disadvantages
These objectives can be explained as follows:
- The International Monetary Fund aims at promoting corporation in international monetary policies via a permanent institution for providing a collaboration and consultation machinery on the international monetary issues.
- To facilitate a balanced growth and expansion of the international trade while contributing to maintenance and promotion of high employment levels and real wages or income as well as facilitating productive resources’ development in the member countries as the primary objective of its economic policy.
- To promote stability in exchange and maintain orderly arrangements for exchange among members. It also aims at avoiding competition that would cause exchange depreciations.
- To facilitate or help in the development of multilateral payments’ system in regards to the current transactions among members and also assist in eliminating restrictions in foreign exchange which hinder growth and development of the world trade.
- To enhance confidence among members by ensuring that funds are available under proper safeguards. This helps the members to correct maladjustments in payments’ balance without embarking on measures that can be detrimental to international and national prosperity.
- To lessen the degree while shortening the period of disequilibrium in balance of payments internationally among members.
Since its inception, the purpose of the International Monetary Fund has not been changed. However, its operations have been adjusted to include surveillance, technical assistance, and financial assistance. These operational changes can be attributed to the need of this organization to meet the ever-changing needs of the member countries in the dynamic global economy.
Generally, the IMF has been a major player in economic policies of the world and the global economy at large. It has played a vital role in fostering economic or financial stability among the member countries and raising the standards of living of people. The International Monetary Fund played a significant role in helping its member countries to recover from the financial crisis of 2008 and also in dealing with the economic crisis that is facing the Eurozone.
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