International Monetary Fund (IMF)

Subject – IR

Context – Gita Gopinath to take No.2 role at IMF as First Deputy Managing Director

Concept –

The International Monetary Fund, or IMF, promotes international financial stability and monetary cooperation.
It also facilitates international trade, promotes employment and sustainable economic growth, and helps to reduce global poverty.
The IMF is governed by and accountable to its 190 member countries.

Primary aims:

Promote international monetary cooperation;
Facilitate the expansion and balanced growth of international trade;
Promote exchange stability;
Assist in the establishment of a multilateral system of payments; and
Make resources available (with adequate safeguards) to members experiencing balance-of-payments difficulties.

Financial assistance: Providing loans to member countries that are experiencing actual or potential balance-of-payments problems is a core responsibility of the IMF.
Surveillance: In order to maintain stability and prevent crises in the international monetary system, the IMF monitors member country policies as well as national, regional, and global economic and financial developments through a formal system known as surveillance.
SDRs: The IMF issues an international reserve asset known as Special Drawing Rights, or SDRs, that can supplement the official reserves of member countries participating in the SDR Department (currently all members of the IMF).
Resources: Member quotas are the primary source of IMF financial resources. A member’s quota broadly reflects its size and position in the world economy. The IMF regularly conducts general reviews of quotas.
IMF Members: Any other state, whether or not a member of the UN, may become a member of the IMF in accordance with IMF Articles of Agreement and terms prescribed by the Board of Governors.
- Membership in the IMF is a prerequisite to membership in the IBRD.

Governance and organization:

The IMF is accountable to its member country governments.
At the top of its organizational structure is the Board of Governors, consisting of one governor and one alternate governor from each member country, usually the top officials from the central bank or finance ministry.
- The Board of Governors meets once a year at the IMF–World Bank Annual Meetings.
- Twenty-four of the governors serve on the International Monetary and Financial Committee, or IMFC, which advises the IMF’s Executive Board on the supervision and management of the international monetary and financial system.
The day-to-day work of the IMF is overseen by its 24-member Executive Board, which represents the entire membership and supported by IMF staff.
The Managing Director is the head of the IMF staff and Chair of the Executive Board and is assisted by four Deputy Managing Directors.
- First Deputy Managing Director is the second top post in IMF next to the Managing Director.
- The First Deputy Managing Director in the IMF takes lead on conducting surveillance, flagship publications and oversee researches.

To know about IMF Quota, please refer October 2021 DPN.