The International Monetary Fund (IMF) is an international organization which was established in 1944 and it provides financial assistance and advice to member countries. Along with World Bank, IMF is the largest public lender of funds in the world. Its headquarters are located in Washington, D.C., United States.
It has membership of 189 countries (as of June, 2009). It performs several functions some of them are as follows –
- It is to create an economic system that can encourage stability and growth in the world economy by economic cooperation among the nations. Especially during these times when world is facing recession.
- Another purpose of IMF is the growth in the global trade, so as to maintain balanced growth of the world economy as a whole and which in turn will promote high level of employment and income, not for one or two years but for several years.
- IMF provides aid to its member countries for correcting balance of payment disequilibrium. It provides liberal assistance to the countries, especially to the less developed and developing countries to overcome balance of payment difficulties.
- Besides, IMF also provides technical support to the member countries to help the countries in promoting their economic growth and stability.
- It aims at establishing exchange rate stability, and elimination of the shortage of international liquidity.
For fulfilling all the above functions IMF gets its money from member states in proportion to the size of the economy of the respective country. It is this proportion contributed by the country to IMF that decides the weight each country has within the IMF, which also decides the voting rights the country have and also how much financing it can receive from the IMF.