Interesting Facts I Bet You Never Knew About International Monetary Fund


International Monetary Fund is an Organization of International of 189 Countries and it’s headquartered in Washington. And it sustained the global economy in just 3 ways. It working to promote high employment, Worldwide Monetary Corporation, encourages International Trade, Secure Budgetary Stability, feasible financial development, and lessen neediness around the globe.


International Monetary Fund

IMF creates alongside World Bank in 1945; as overlapping finance arms of the United Nations. The World Bank focuses on financing and investing in developing countries, as well as eliminating. The International Monetary Fund is responding to the 189 nations that make up its close worldwide membership. It came with 29 part nations and the objective of recreating the global installment framework. It now assumes a central role in the administration of adjusting to installments challenges and global budgetary crises. And the International Monetary Fund works to progress or enhance the economies of its all parts of Countries. The International Monetary Fund provided 32 Billion Euros in emergency loans to keep the Greek economy from collapsing.

So, why the IMF take a risk on such an unstable economy?

Well since World War 2, the world’s economies have turned out to associate with each other through exchange and venture. While its help reinforces the worldwide budgetary system. It also creates weakness in the economic change. When an unforeseeable crisis, like a recession or a natural disaster, destabilizes one nation’s economy, it can severely affect dependent countries. The balancing force of the International Monetary Fund prevents any potential domino effect in collapsing economies. The IMF is one of several global Banks that provides loans to troubled economies to promote a stable world economy.

The International Monetary Fund and its organization:

The World Bank, tend to serve more western interests, like the US and the EU. While other global banks like the new development Bank and Asian Infrastructure Investment Bank serve Chinese and Russian interests more. The demand for imported goods from Africa declined, and international growth rates slowed. In response, International Monetary Fund proactively made billions of Dollars, and it is available to places like Ghana at extremely low interest rates.

With this support,

Ghana’s growth rate increased to over 9 % in 2011 and remains one of Africa’s frontier emerging markets. Currently, the IMF’s biggest borrowers are Greece, Portugal, Ireland, and Ukraine.The International Monetary Fund also gives precautionary loans as a sort of preventative measure before things get too bad. Receivers of precautionary loans include Mexico, Poland, Colombia, and Morocco. Despite their support, the IMF has widely criticize for allowing disparate levels of influence. This is because member nations which invest more money in the IMF get more voting rights.

The US comprises nearly a fifth of all available votes because they are the largest contributor. Additionally, since the IMF is somewhat of a last resort, countries in trouble have no choice. But, to agree to significant austerity measures that they may not necessarily be in their best interests or agree with their ideologies. While the IMF is a powerful force within the world economic balance, it also openly serves the interests of its member countries.

IMF: Austerity is much worse for the economy than we thought:

With so much influence in the political policies of struggling countries, it is dangerous to try and treat domestic problems with simple cash infusions and austerity measures. However, without it, countries like Greece may face worse alternatives.

IMF: Whats ahead for the Indian Economy:

India was actually quite badly hit in the immediate after a month of the crisis October 2009. But, actually, India is very tightly integrated with the global economy and particularly through the financial channels. In other words, a lot of India’s investment depends on foreign finance and when the crisis hit initially that dried up. But the policymakers were very nimble in providing stimulus to the economy interest rates were cut a lot of facilities. Were put in place by the Reserve Bank of India to help credit keep following through the economy.

Indian’s Economy:

Therefore, Indian’s downturn has been contributing very strongly to the global. And recovery along with China, which is the other very strongly growing economy, more generally the Asian region is growing quite strongly and it is leading as a region leading global recovering. India integrated with the global economy but still maintains quite a lot of controls. In particular, the banking system in India did not become involved in any of these activities that in the end were brought down the banking systems in the US and in Western Europe.

So, that extent it was completely insulated from the so-called toxic assets that were being held by these other banks in this other countries. So, there was a general pullback of capital as banks were consolidating through the crisis. Once that, the period was finished. And funds started to flow back to India, the stock markets getting back the funds and the other indices in India going back up. So, yes the controls and the fact that the Indian economy is especially the financial sector is still relatively insulated helped. And then the policies that were put in place also helped. India’s come a long way in the early 1990s; there was a slew of financial sector reforms interest rate.

Advantages to India from International Monetary Fund’s Membership:

It is great that India joined the International Monetary Fund. There is presumably that this enrollment has been extraordinarily advantageous to India.

(I) International control by IMF in the field of cash has unquestionably contributed towards the extension of universal exchange and in this way flourishing. India has, to that degree, profited from these productive outcomes.

(ii) The aggregate figures of borrowings by India from the IMF don’t pass on the degree of the help that it stretched out to her. And, such helps to benefit from when the nation was looking for basic outside trade circumstances.

(iii) Aid from World Bank and Other International Financial Agencies:

The participation of the IMF has profited India in yet another vital way. India needed huge remote capital for her different stream ventures, arrive recovery plans and for the advancement interchanges. Since private outside capital was not prospective, the main practicable technique for acquiring the vital capital was to get from the International Bank for Reconstruction and Development (i.e. World Bank).

The participation of the International Monetary Fund is a fundamental condition point of reference to the enrollment of the World Bank. In this way, India’s enrollment of the IMF has qualified her for be an individual from the World Bank and its offshoots viz., International Finance Corporation (IFC) and International Development Association (IDA).

(iv) India has profited from the administrations of masters of the IMF to assess the condition of the Indian economy. Groups of specialists have frequently been coming to India and submitting reports. Along these lines, India has had the advantage of free examination and exhortation.

(v) Contribution to International-Monetary-Concord:

The vital place which India has consequently involved in the global boards in the fields of world exchange and the fund has been a certification that her advantages would not endure. Or maybe, she can profit from whatever offices are accessible from the luckier countries. At that point, aside from her own particular pick up, by her participation, she is adding to global harmony and co-operation in the money related and monetary fields.

(vi) Provision of Oil-Facility.

The adjust of installments position of India has gone totally out of rigging by virtue of the oil value acceleration since October 1973. And the IMF has begun making accessible oil office by setting up a unique store for the reason. As per a report of the International-Monetary-Fund,

The most noticeably bad hit among the creating nations of the world is India. In 1974 of August, India drew Rs. 194 crores from International-Monetary-Fund & Rs. 207 crores in August 1975.

In 1981, India prevailing with regards to getting an enormous advance of Rs. 5000 crores from International Monetary Fund to hold over the balance of installments issue looked at it. So, the single biggest advance made by IMF to a part nation was International Monetary Fund. India wisely utilized this advance and utilized just Rs. 3900 crores & surrendered the balance to International Monetary Fund.


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