International Monetary Fund

This international monetary institution was established by 44 nations under his Bretton Woods Agreement of July 1944. The main aim was to remove his economic failures of 1920s and 1930s. The attempts of many countries to return to old gold system after world war failed miserably. The world suppression of the thirties forced every country to abandon gold standard. This led to the adoption of purely nationalistic policies whereby almost every country imposed trade Restrictions, exchange control, and resorted to exchange depreciation in order to encourage its exports. This will lead to further spread of depression. It was against this background that 44 nations assembled at the United Nations monetary and financial conference at Breton woods, New Hampshire (USA) from 1st July to 22nd July 1944. Thus the IMF was established to promote economic and financial co-operation among the members in order to facilitate expansion and balanced growth of world trade. It started functioning from 1st march 1947.   One of the most important players in the current international financial system, the IMF was created to administer a code of fair exchange practices and provide compensatory financial assistance to member countries with balance of payments difficulties. The fundamental purpose and objectives of the fund had been said down in Article of the original Articles of agreement and they have been upheld in the two amendments that were made in 1969 and 1978 to its basic charter.

The IMF has performed well as an international monetary institution. It has been supplying different currencies to different countries for making adjustments in their balance of payments over a long period. Both the developed and developing countries have made extensive use of its resources. It has tried to solve the problem of international liquidity by making suitable amendments to its Articles of agreements. It has this proved its flexibility by moving with the changed international economic conditions. But it can not be said that it has been our overall success in fulfilling its objectives.