What is the International Monetary Fund (IMF)?

About International Monetary Fund (IMF):

• It is a United Nations (UN) specialized agency, founded at the Bretton Woods Conference in 1944.
• It was established in the aftermath of the Great Depression of the 1930s.
• The main objectives of the IMF include supporting global monetary cooperation, securing financial stability, facilitating international trade, promoting high employment and sustainable economic growth, and reducing poverty.
• Through its economic surveillance, the IMF keeps track of the economic health of its member countries, alerting them to risks on the horizon and providing policy advice.
• It also lends to countries with balance-of-payments difficulties, and provides technical assistance and training to help countries improve economic management. 
• IMF funds are often conditional on recipients making reforms to increase their growth potential and financial stability.
• It is currently composed of 190 member countries.
• The IMF is headquartered in Washington, DC.
• Structure:
  • At the top of its organizational structure is the Board of Governors, consisting of one governor (usually the minister of finance or the governor of the central bank) and one alternate governor from each member country. 
  • All powers of the IMF are vested in the Board of Governors. 
  • The day-to-day work of the IMF is overseen by its 24-member Executive Board, which represents the entire membership and is 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. The managing director is usually a European.
  • The IMF has 18 departments that carry out its country, policy, analytical, and technical work.
• Each member contributes a sum of money called a quota subscription.
• • Quotas are reviewed every five years and are based on each country’s wealth and economic performance—the richer the country, the larger its quota, making the S., with the world's largest economy, the largest contributor.
  • The quotas form a pool of loanable funds and determine how much money each member can borrow and how much voting power it will have.
• Voting Powers:
  • Quotas of member countries are a key determinant of the voting power in IMF decisions.
  • Votes comprise one vote per 100,000 special drawing rights (SDR) of quota plus basic votes.
  • SDRs are an international type of monetary reserve currency created by the IMF as a supplement to the existing money reserves of member countries.