International Monetary Fund (IMF) Definition

Purpose of IMF

The International Monetary Fund, or IMF, is a multinational organization with the goal of fostering global trade, generating high em-loyment and sustained economic growth, and reducing poverty.

According to the IMFs website, its “primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other.

The Fund’s mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on global stability.”

Created in 1945 and based in Washington, D.C., the IMF consists of a board representing 189 countries.

Their representation is based on the county’s economic power, so more financially influential countries have greater voting power.

The IMF’s primary activities are surveilling economies, capacity building, and lending.

Uses of IMF In Finance?

The IMF’s primary activities are surveilling economies, capacity building, and lending.

  • Surveillance: The IMF collects data on national economies, as well as international trade and the global economy. In addition, they provide regular economic forecasts which are published in the World Economic Outlook.
  • Capacity Building: Through its capacity building programs, the IMF provides assistance, training, and policy advice to its member countries. Part of the training consists of how to collect economic data, which the IMF also takes to publish in its reports.
  • Lending: In order to mitigate financial crises, the IMF makes loans to countries experiencing financial distress. The funds total around $645 billion USD and are contributed by member countries based on a quota. The IMF measures its finances in SDR, or special drawing rights, which is a kind of pseudo-currency comprised of set proportions of the world’s reserve currencies.

 

International Monetary Fund (IMF) Definition FAQs

IMF is an acronym for International Monetary Fund.
The International Monetary Fund, or IMF, is a multinational organization with the goal of fostering global trade, generating high employment and sustained economic growth, and reducing poverty.
According to the IMFs website, its “primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other.
Created in 1945 and based in Washington, D.C., the IMF consists of a board representing 189 countries. Their representation is based on the county’s economic power, so more financially influential countries have greater voting power.
The IMF’s primary activities are surveilling economies, capacity building, and lending.