IMF and Government Debt - INTERNATIONAL MONETARY FUND Also...

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INTERNATIONAL MONETARY FUND Also known as the Fund. It was established at a UN conference in Bretton Woods, New Hampshire, United States, in July 1944. It was built for economic cooperation among nations to avoid the repetition of competitive devaluations that led to the Great Depression in 1930s. IMF is currently composed of 188 member countries and managed by the executive board with 24 directors representing a single country or a group of countries. It is located in Washington, D.C. As of March 2015, IMF has a total quota of US$327 billion. Presently, its largest borrowers are Portugal, Greece, Ireland, and Ukraine. The primary purpose of IMF 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. More specifically, it aims to provide a forum for cooperation on international monetary problems; facilitate the growth of international trade, thus promoting job creation, economic growth, and poverty reduction; promote exchange rate stability and an open system of international payments; and lend countries foreign exchange when needed, on a temporary basis and under adequate safeguards, to help them address balance of payments problems. It seeks to achieve its mission through: surveillance, lending, and technical assistance. Surveillance is where the IMF oversee the international monetary system and monitors the economic and financial policies of its member countries. When a country joins the IMF, it agrees to subject its policies to the scrutiny of the international community. It commits to pursue policies that would lead to economic growth and price stability to avoid manipulating the exchange rates for unfair competitive advantage. According to the Article IV of the IMF’s Articles of Agreement, the IMF team of economists will visit annually a country to assess economic and financial developments and discuss policies with the government and central bank’s officials. They also often meet with representatives of the business, labor unions, and civil society. The team will then report its finding to the IMF management and present it for
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