Category

Specialized Agencies

HQ location

Washington D.C.

Date established

1944

Resolution

GA Resolution 124(II)

Joined CEB

15 November 1947
Managing Director

The International Monetary Fund (IMF) is an organisation of 187 countries that works to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty. As of March 2011, the IMF had $111.8 billion in loans outstanding to 87 countries. Of this, $7.7 billion was on concessional terms to 65 countries.

The IMF Articles of Agreement were drawn up at the Bretton Woods Conference in 1944. Membership is open to all countries. Ratification of the articles and acceptance of conditions laid down by the Fund are conditions of membership. The purposes of the Fund are to:

  • Promote international monetary cooperation through consultation and collaboration
  • Facilitate the expansion and balanced growth of international trade, and thereby contribute to the promotion and maintenance of high levels of employment and real income
  • Promote exchange stability and orderly exchange arrangements
  • Assist in the establishment of a multilateral system of payments and the elimination of foreign exchange restrictions
  • Assist members through the temporary provision of financial resources to correct maladjustments in their balance of payments.

The articles have been amended six times, in 1969, 1978, 1992, 2009 and twice in 2011.  The first amendment provided for the creation and allocation of SDRs.  The second amendment implemented a review of the Fund's responsibilities and operations that was conducted from 1972 to 1976 following the collapse of the fixed exchange rate system.  The third empowers
the Fund to suspend the voting and certain related rights of a member who fails to fulfil any of the obligations under the articles, other than obligations with respect to SDRs.

The fourth amendment was to provide for a special one-time allocation of SDRs so as to equalise members' ratio of cumulative allocations to their ninth review quotas.  Amendments proposed in 2008 entered into effect in February and March 2011.

The first expanded the IMP's investment authority, allowing the IMF a wider range of income sources than the previous reliance primarily on lending to member countries.

The second strengthened the representation of emerging market and developing economies in the IMF and enhanced the voice and participation of low-income countries. Fifty-four countries received quota increases totalling around $33 billion.

In November 2010, the IMF agreed wide-ranging governance reforms to reflect the increasing importance of emerging market countries while protecting the voting shares of smaller developing countries in the Fund. The proposal was for a doubling of total quotas to about $756 billion, and for more than 6 percent of quota shares to shift to dynamic emerging market and developing countries and more than 6 percent from over-represented to under-represented countries in the Fund.  The proposals would also lead to a more representative, all-elected executive board.

 

The Board comprises one governor appointed by each member country- typically a minister of finance or central bank governor. Substantive or policy matters are transmitted in the form of a report and draft resolution to the Governors for their vote when one is required.  An annual meeting of the Board, in conjunction with that of the World Bank Group, is held in late September/ early October. 

The Board's International Monetary and Financial Committee (IMFC) meets in April and September. Its terms of reference are the supervision of the international monetary system, including the operation of the adjustment process and global liquidity. 

The Development Committee (the Joint Ministerial Committee of the Boards of Governors of the Bank and the Fund on the Transfer of Real Resources to Developing Countries) generally meets at the same time as the IMFC.  It advises and reports to the World Bank and IMF Boards of Governors on all aspects of the real transfer of resources to developing countries. Each member country or group of member countries represented on the Executive Board appoints a member of the Committee.

This board is responsible for the Fund's daily business, including requests for financial assistance, economic consultations with member countries, and the development of Fund policies. It consists of the Managing Director, as Chair, and 24 executive directors. Of these, eight are appointed by members having the largest quotas - USA, Germany, Japan, UK, France, Russian Federation, China and Saudi Arabia - while the remainder are elected to represent the interests of constituencies made up of several countries. Elections can vary across the constituencies, with many being held every two years.

Each member has an assessed quota that is subscribed and determines voting power. Access to use of the Fund's resources is also determined in relation to quota, taking account of the member's balance of payments need and the strength of the policies it agrees to implement to restore balance of payments viability.  The total of members' quotas, as of April2011, was about $384 billion.

Members may draw on non-concessional terms from the general resources of the Fund, which are derived from quota subscriptions, under credit tranches (of 25 percent of quota each).  Drawings (or 'purchases') in the upper credit tranches - in other words, beyond the first credit tranche - are subject to the terms of a stand-by arrangement agreed with the member. This arrangement specifies the precise economic policy conditions that the member must meet to qualify for each purchase, and the scheduling of purchases. 

Stand-by arrangements usually cover a 12- to 18-month period, but may be as long as three years. Members are expected to meet their repurchase expectations, but the Fund may extend them on request if the Executive Board agrees that the member's external position is not sufficiently strong for it to repay early without undue hardship or risk.

There is also an Extended Fund Facility under which members with structural maladjustments and experiencing balance of payments difficulties can enter into extended arrangements for up to 36 months.  These can be in amounts larger than is possible under the credit tranches.

A Flexible Credit Line (FCL) was announced on 24 March 2009, and subsequently expanded in August 2010, to address actual or potential balance of payments needs for countries with strong fundamentals, policies and track records of policy implementation. Countries seeking to use the FCL need to meet a set of up-front criteria, rather than facing ex-post or ongoing conditions.  Having met the up-front criteria, a country then has the choice of drawing on the credit line at any time or to treat it as a precautionary instrument.

At the time the FCL was expanded, a Precautionary Credit Line (PCL) was added to the toolkit for countries with sound fundamentals and policy track records but that face moderate vulnerabilities preventing them from meeting the high FCL qualification standards.  The PCL combines some Up-front criteria with ex-post conditions that focus on the vulnerabilities identified.

At the same time as the FCL was introduced, the Fund announced an enhanced framework for its Stand-By Arrangements (SBA). The enhanced framework allows countries ineligible for the FCL to have high access to the SBA funds on a precautionary basis, allows frontloading of access, reduces the frequency of reviews and provides greater flexibility for country-specific circumstances in determining the programme for reviews.

In September 1999, a new Poverty Reduction and Growth Facility (PRGF) replaced and strengthened the IMP's concessional lending under the former Enhanced Structural Adjustment Facility (ESAF).  The ESAF had provided concessional loans to qualifying low-income countries, aimed at strengthening balance of payments and fostering growth. 

The PRGF has broadened this initiative to explicitly include lasting poverty reduction as well as to encourage sustainable growth.  The PRGF provides a vehicle for integrating mutually reinforcing macroeconomic, structural and social policies, and is geared much more towards using social indicators to measure progress.

Under the PRGF, low-income countries may borrow on concessional terms through three main facilities:

The Extended Credit Facility, which is designed to provide medium-term support to address protracted balance of payments problems;

The Standby Credit Facility (SCF), which addresses short-term balance of payments needs and includes an option to use
the SCF on a precautionary basis;

The Rapid Credit Facility (RCF), which is for emergency assistance with limited conditionality in the event of an urgent balance of payments need.  These changes were agreed in tandem with commitments to enhance the Heavily Indebted Poor Countries (HIPCs) initiative.

The Fund has created and allocated Special Drawing Rights (SDRs) to supplement member countries' reserves and thereby improve the liquidity of the international monetary system.  Members may use SDRs to acquire currency from other members for use in alleviating balance of payments difficulties, and in a variety of other transactions.  Members in strong balance of payments positions may be designated to accept SDRs from other members with a weak balance of payments in exchange for currency.

Allocations of SDRs are made over two basic periods that generally run to five years. The US dollar value of the SDR is posted daily on the IMF's website.

The IMF has 187 member countries :

Afghanistan, Islamic Republic
Albania
Algeria   
Angola    
Antigua and Barbuda
Argentina
Armenia    
Australia   
Austria
Azerbaijan
Bahamas
Bahrain    
Bangladesh    
Barbados    
Belarus
Belgium    
Belize
Benin
Bhutan
Bolivia
Bosnia and Herzegovina
Botswana
Brazil
Brunei Darussalam
Bulgaria
Burkina Faso
Burundi
Cambodia
Cameroon
Canada
Cape Verde
Central African Republic
Chad
Chile
China
Colombia
Comoros
Congo
Congo
Costa Rica
Côte d'Ivoire
Croatia
Cyprus
Czech Republic
Denmark
Djibouti
Dominica
Dominican Republic
Ecuador
Egypt
El Salvador
Equatorial Guinea
Eritrea
Estonia
Ethiopia    
Fiji, Republic
Finland
France
Gabon
Gambia
Georgia
Germany
Ghana
Greece
Grenada
Guatemala
Guinea
Guinea-Bissau
Guyana
Haiti
Honduras
Hungary
Iceland
India
Indonesia
Iran, Islamic Republic
Iraq
Ireland
Israel
Italy
Jamaica
Japan
Jordan
Kazakhstan
Kenya
Kiribati
Korea
Kosovo
Kuwait
Kyrgyz Republic
Lao People's Democratic Republic
Latvia
Lebanon
Lesotho
Liberia
Libya
Lithuania
Luxembourg
Macedonia, former Yugoslav Republic
Madagascar
Malawi
Malaysia    
Maldives
Mali
Malta
Marshall Islands
Mauritania
Mauritius
Mexico
Micronesia, Federated States
Moldova
Mongolia
Montenegro
Morocco
Mozambique
Myanmar
Namibia
Nepal
Netherlands
New Zealand
Nicaragua
Niger
Nigeria
Norway
Oman
Pakistan
Palau
Panama
Papua New Guinea
Paraguay
Peru
Philippines
Poland
Portugal
Qatar
Romania
Russian Federation
Rwanda
Samoa
San Marino
São Tomé and Príncipe
Saudi Arabia
Senegal
Serbia
Seychelles
Sierra Leone
Singapore
Slovak Republic
Slovenia
Solomon Islands
Somalia
South Africa
South Sudan, Republic
Spain
Sri Lanka
St. Kitts and Nevis
St. Lucia
St. Vincent and the Grenadines
Sudan
Suriname
Swaziland
Sweden
Switzerland
Syrian Arab Republic
Tajikistan
Tanzania
Thailand
Timor-Leste
Togo
Tonga
Trinidad and Tobago
Tunisia
Turkey
Turkmenistan
Tuvalu
Uganda
Ukraine
United Arab Emirates
United Kingdom
United States
Uruguay
Uzbekistan
Vanuatu
Venezuela, República Bolivariana de
Vietnam
Yemen, Republic
Zambia
Zimbabwe

 

The Board of Governors of the IMF and the Board of Governors of the World Bank Group normally meet once a year to discuss the work of their respective institutions.

700 19th Street NW
Washington DC 20431
United States of America
Telephone: (+1 202) 623 7300
Fax: (+ 1 202} 623 6278
Email: publicaffairs@imf.org