The International Monetary Organization is an international institution headquartered in Washington DC (the capital of the United States).
Christine Lagarde is currently the managing director of this institution. Currently, 189 countries are its members. All these countries together follow global monetary cooperation.
Financial stability, increase employment opportunities in all countries, increase international trade and diagnose problems related to it, boost the economics of any country, take various measures to reduce the problem of poverty in the world – IMF members in Objectives.
The IMF was the result of the Bretton Woods Conference and came into existence in the year 1945, although its formation was announced in the year 1944.
At that time, it had 29 member countries, which at that time had only the objective of how to make the international payment system worldwide properly. After this, they came up with a system whereby the standard of currency can be calculated in the international market.
In 1944, when the then US President Roosevelt called Bretton Woods a conference to rebuild the world economy after World War II.
It was attended by 44 delegates from Allied Nations. India was represented by the first Governor of the Reserve Bank of India, Sir D. Deshmukh. The conference was named the United Nations Currency and Financial Conference, which was later called the Bretton Woods Conference in the name of the place.
Some of the erstwhile people who played an important role in this conference were – US President Roosevelt, United Kingdom (UK) Prime Minister Winston Churchill, Harry Dexter and UK Treasory John Maynard Keynes.
This conference led to the birth of four important institutions:
- International Monetary Fund (IMF)
- world Bank
- Genral Agreement on Trade & Tariff – In 1995, it became the World Trade Organization (WTO).
- Fixed exchange rate system – It was discontinued in the 1970s.
The IMF plays an important role in solving problems related to management of balance payment and international financial problems. The member countries collect funds together through the quota system and then those countries who are facing economic and financial problems are given loans. The IMF has given birth to a new system of standard of currency called the Flexible Change Rate System. The official languages of the IMF are English, French, Russian, Chinese, Spanish and Arabic.
IMF Quota and Voting Rights (IMF Quota & Voting Rights in Hindi)
The quota of member countries is decided on the basis of how strong the economy of a country is and how much amount they can deposit in the IMF. Members are given the right to vote on the basis of this quota.
SDR (Special Drawing Rights – SDR in Hindi )
This is supplementary foreign exchange held by the IMF as reserve money. It represents a currency which is vested with the member countries with whom to exchange the currency.
The SDR standard is denoted by five major currencies – the US Dollar, Euro, British Pound, Chinese Yuan and Japanese Yen. The SDRs of the IMF are run by the Central countries of the member countries which are used by them when there is an economic crisis in their country.
Reverse Tansche- RT
A part of the quota of any member country is called RT. The member country can spend this part on its own and there is no need to return it immediately. This share is about 25 percent of the entire quota