Origin of IMF
World was facing considerable financial and political turmoil since World War 1.this was the time when economic activities had started weakening and the exports were restricted. The employment was reducing and out put was getting shorter and shorter. This had resulted an economic disorder that was raising lack of economic coordination because of the restrictions imposed by different governments.
This situation continued till Second World War. When II world war was over, the world economies had almost collapsed. Effects of great depression was felt everywhere in the world and reconstruction of the institutions and economies had commenced. Some of the nations were to come out as debtors and some as major creditors. It was this era when it was comprehended by the world leading countries and its allies that further economic pandemonium must be controlled.
USA and Britain were the main nations behind this movement when during the Breton Woods Conference of United Nations in 1945 International monetary fund was established. The fund was created and subscribed by its member countries with a view to provide financial assistance to war torn countries [Giovanni E, Reyes]. After establishing the IMF, world expected some change in form of better monetary system, improved economies and better coordination amongst different country’s trades. Provision of monetary assistance provided controlled development in the underdeveloped countries.
Functions of IMF
IMF was established with close cooperation of the international bank for reconstruction and development. The IMF was to purchase foreign currencies so as to stabilize exchange rates besides discharging international indebtedness. The special drawing rates were based on leading currencies of the world. The role of IMF has changed over a period of time and has become a strong financial institution that provides financial assistance to different countries. The objectives of the IMF were set........
