International Monetary Fund (IMF)

The history of the IMF

The IMF was originally a part of the Bretton Woods System exchange agreement in 1944. This was a monetary management between the United States, Canada, the Western European countries, Australia and Japan. After the second world war the economies in many countries were failing and it came to devaluations of national currencies. The countries wanted to improve these economies and 45 governments met at the Bretton Woods conference in the Mount of Washington Hotel in Bretton Woods to discuss possible cooperations in improving economies around the world and ideas in rebuilding Europe after the second world war. The IMF finally came to existance on 27 december 1945 with 29 countries. In the end of 1946 the IMF already had 39 members. The first financial operations could began in march 1947 and on 8 may the same year France could borrow Money for the first time. Now all countries who are memebrs of the IMF have the possibility to borrow money like Greece, Portugal, Ireland and France for example did.

The purpose of the IMF

The IMF (International Monetary Fund) was created in an attempt to stabilize the international monetary system. This, as a primary goal, was approached through three core concepts: keeping track of the global economy and its member countries, lending to countries with balance of payments difficulties, and finally giving practical help to members. One purpose of the IMF in this approach was to be a lender of last resort by relieving and supporting developing countries in regions such as Asia, Africa, and South America. Furthermore, liberalization is central to the values of the IMF as, through a liberalized banking sector as well as the decrease of inflation, countries are incentivized to participate in the global economy.

Tasks

It´s main task is to lend to countries without sufficient currency reserves that have run into balance of payment difficulties. Other areas of activity include promoting international cooperation in monetary policy, expanding world trade, stabilising exchange rates, monitoring monetary policy and giving practical help to members.