What Purpose Does the International Monetary Fund Serve and How Important Is It Actually on a Global Basis?

By: Raashi Khamkar

The International Monetary Fund (IMF) is an institution focused on the development of sustainable growth within the 191 countries the United Nations recognizes through the assistance of economic policies and financial stability. Originally founded to assist the UN, the IMF reaches a broader goal of promoting job opportunities, strengthening an economic backbone, and increasing productivity. There are three fundamental goals of the IMF: improving global monetary partnerships, furthering the expansion of economic growth and trade, and preventing the possibility of policies threatening international prosperity. To foster financial stability, the IMF focuses on policy advice, financial assistance, and capacity development. All of these aspects include recording the economic developments within countries, providing loans to member delegations, and training governments to implement policies that strengthen local economies. 

The International Monetary Fund has a regular “policy dialogue" between its member countries. Aimed to assess economic conditions through the recommendation of certain policies, such as efficient public spending and managing debts, the IMF attempts to reach an overall goal of sustainable growth. Additionally, the IMF provides capacity development or the training and technical assistance of individuals involved in governmental discussions to strengthen these economic bodies and their reflecting statistics. Capacity development furthermore covers administrative facets, taxation, expenditure management, financial program supervision and regulation, legislative outlines, and monetary and exchange rates. With the help of member quotas, a fixed share that a delegation must provide based on size and the current economic state, the IMF has a stable source of funding. Besides quotas, the IMF relies on New Arrangements to Borrow and bilateral borrowing agreements to allocate funding if member quotas fail to suffice. 

The IMF was founded after the Great Depression to avoid repeating the financial repercussions of such events. A prominent example of how the International Monetary Fund has currently been helpful for countries is during the Covid-19 pandemic. The pandemic severely weakened many member states as they lacked many resources that more developed countries or 1st world countries had. The IMF increased its access to all of its funds and emergency financing. Zero interest rates were extended on concession loans. 

The International Monetary Fund has benefited many countries and facilitates stronger monetary development between delegations. 

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Works Cited

International Monetary Fund. “The IMF at a Glance.” International Monetary Fund, 2024, www.imf.org/en/About/Factsheets/IMF-at-a-Glance.

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