Imf Fund Agreement

The IMF lends to countries in economic difficulty to prevent or mitigate financial crises. Members give the necessary funds to grant credits to a pool based on a quota system. In 2019, SDR 11.4 billion (SDR 0.4 billion) was guaranteed to support IMF lending for the next decade. After ratification by 29 countries, the articles of the agreement entered into force on 27 December 1945. The Fund`s Board of Governors met the following year in Savannah, Georgia, USA, to adopt Articles of Agreement and elect the IMF`s first Executive Directors. The governors decided to find the organization`s permanent headquarters in Washington, D.C., where the original 12 executive directors first met in May 1946. The IMF`s financial operations began the following year. At the end of March 2014, the IMF provided an $18 billion rescue fund for the interim government of Ukraine after the 2014 Ukrainian revolution [56] [57] 5. If a Member has reached an agreement with the Fund in accordance with Article 3, the Fund shall use the currencies of other Members allocated to it in accordance with point 2(d) to exchange the currency of that Member, which shall be granted to other Members which have concluded agreements with the Fund in accordance with point 3. Any amount so collected shall be cashed in the currency of the member over whom it has been distributed.

IMF conditionality is a series of guidelines or conditions that the IMF needs in exchange for financial resources. [19] While requiring guarantees from countries for loans, the IMF also requires the government to seek support to correct its macroeconomic imbalances in the form of policy reforms. [28] If the conditions are not met, the credits are retained. [19] [29] The concept of conditionality was introduced in 1952 in a decision of the Executive Committee and then incorporated into the statutes. Conditionality also assures the IMF that the funds lent to it will be used for the purposes defined by the articles of the agreement and provides guarantees that the country will be able to correct its macroeconomic and structural imbalances. [31] The IMF believes that the member`s adoption of certain corrective measures or policies will enable it to repay the IMF and thus ensure that resources are available to assist other members. [29] Each member deals with the Fund only through its Treasury, central bank, stabilization fund or other similar budget agency, and the Fund deals only with the same agencies or through the same agencies. The role of the IMF was profoundly altered by the variable exchange rates after 1971. She turned to the economic policy study of countries under IMF credit agreements to determine whether the lack of capital was due to economic fluctuations or economic policies. The IMF also examined what types of government policies would ensure economic recovery. [19] One of the IMF`s particular concerns was to prevent financial crises such as those in Mexico in 1982, Brazil in 1987, East Asia 1997-1998, and Russia in 1998 from spreading and threatening the entire global financial and monetary system. .

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