The International Monetary Fund, Eng. The International Monetary Fund (IMF), a special organization under the United Nations, was established in 1945. The statutes are based on the agreement concluded in July 1944 in Bretton Woods, USA, between 44 Allied countries at the initiative of the United States and the United Kingdom. The purpose of the Fund is to promote economic growth based on international trade and orderly exchange rates.
The IMF has (2008) 185 member countries.
The Fund is chaired by a Board of Governors in which all countries are represented, but the Board’s authority is to a large extent delegated to a Executive Board of 24 members. Each of the members here represents either a country or a group of countries; eg. the Nordic and Baltic countries are represented by one director. Headquartered in Washington DC The Director General of the IMF since 2007 is former French Finance Minister Manny Palstein.
Each country has a quota in the currency fund that is determined by the size of the country, the importance of foreign trade, etc. The quota constitutes the individual country’s contribution to the fund. It determines the number of votes the country has, a scheme that causes the United States, the United Kingdom and other industrialized countries to hold a dominant position. The ratio is also decisive for the credit that each member country can obtain in times of payment deficit.
The Statute of the Monetary Fund entails obligations and rights for the individual country.
The most important is the obligation to maintain convertibility for current transactions, ie to enable companies and individuals to freely acquire the currency they need to import goods and services. However, the currency for capital investments (bank deposits, receivables, real estate, real estate etc.) can be regulated. Under the original agreement, the countries also undertook to maintain fixed exchange rates, ie the exchange rate in their own currency should only be able to fluctuate one percent on each side of the par exchange rate. Changing the par rate required approval of the foreign exchange fund, and this should only be given when there was a “fundamental imbalance” in the country’s foreign accounts.
Credits that countries can draw on without making a payment in advance.
From the beginning of the 1970s, more and more countries suspended the fixed exchange rate arrangements, and the fund agreement was reviewed. The revised fund agreement, which entered into force on April 1, 1978, allowed countries to choose between fixed and floating exchange rates, but the original purpose of the currency fund was not changed. Following the 1973/74 oil crisis, the Fund introduced several new credit schemes, of which the oil facility was the most important. This was replaced by an expanded fund facility that gave countries with structurally related problems in their foreign economy access to credits with a longer maturity than ordinary drawing rights.
On January 1, 1970, the Fund introduced Special Drawing Rights (SDRs), special drawing rights.
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