Functions Of International Monetary Fund | Functions Of IMF | Dr. Sahil Roy скачать в хорошем качестве

Functions Of International Monetary Fund | Functions Of IMF | Dr. Sahil Roy

The main functions of International Monetary Fund Functions Of International Monetary Fund Functions Of IMF Dr. Sahil Roy 1.Lending for meeting temporary Unfavourable Balance of Payments Position The IMF does not lend for developmental projects. The financial assistance provided by IMF enables the members to reduce its deficit of balance of payments and other short-term external liabilities. These lending's are to be paid back in three to five years. 2. Purchase and Sale of foreign Currency The fund buys and sells the currencies of the member countries. Whenever a country buys the currency of another country from the Fund, the latter makes it available by purchasing the same from the country concerned, of which it constitutes the national currency. In any one year a member country can purchase from the Fund foreign currency up to the maximum of 25% of its quota. But in some cases IMF can raise this limit to even 100 per cent of quota. 3. Bank of Central Banks The fund is called the bank of the central banks of different member countries of the world. Just as a central bank holds the cash of the commercial banks of the country, likewise IMF also holds reserves of the central banks of the member countries. 4. Technical Assistance The fund also provides technical assistance to its member countries. The fund sends its experts on deputation to member countries to advise them on matters like exchange control, foreign payments, credit control, central banking and economic policy etc. The fund also publishes many technical journals and magazines. 5. Imparts training It also imparts training to the representatives of member countries. This training is imparted to the senior officers of the central banks and finance departments. In 1975,a training centre was set up to impart training to policy makers of different nations. 6. Facilities during Emergency Although IMF is opposed to any sort of controls either on foreign exchange or on foreign trade, yet member countries have been given the right to resort to these controls during emergency in the hope that they will lift it as early as the situation warrants. 7. Increases International Liquidity IMF has increased international liquidity by creating a new currency in the form of SDR.IMF also lends foreign currency to member countries. All this increases international liquidity. 8. Determining Exchange rate for every member country When a country becomes member of the fund, it has to declare par value of its currency in terms of dollar or gold. This facilities multilateral convertibility of that currency. But now exchange rate is determined by market forces of demand and supply, so this function has been dropped. 9. Poverty Reduction For helping low income countries having extreme poverty, IMF has set up a special fund. In this fund, contribution is received from developed nations and from emerging developing nations. India is also contributing US$1 million per year in this fund. 10. Change in Exchange rate 11. Research Functions: