The various features of IMF
The various features of IMF
Features of IMF: Various features of international monetary fund are as follows
1. Systematic Mechanism: The IMF is responsible for the creation and maintenance of the international monetary system, i.e. the system by which international payments among countries take place. Thus, it strives in providing a systematic mechanism for foreign exchange transactions so as to foster investment and promote balanced global economic trade.
2. Policy Advisor: It provides policy advices and financing to members who are in economic difficulties and also works with developing nations to support in achieving macroeconomic stability and reduce poverty. The rationale related to this is that private international capital markets function in an imperfect manner and various countries have limited access towards the financial markets.
3. Finance Mobiliser: IMF provides concessional loans to low-income member countries for supporting these countries’ efforts in order to eradicate poverty. In such a venture, the IMF works along with the World Bank and other development partners. In this area, the IMF also plays a critical catalytic role for the mobilisation of external financing and donor support for the countries balance of payments and their development needs.
4. Technical Trainer: Technical assistance and training are provided in the core areas of IMF expertise to help member countries in designing economic policies and improving economic management capabilities, which can help to reduce the risk of policy failures and the countries resilience to shocks, and thus facilitates program design and implementation.
5. Trade Facilitator: IMF facilitates in the expansion and balanced growth of international trade, and it contributes thus to the promotion and maintenance of high levels of employment and real income and also to the development of the productive resources of all members in the form of primary objectives of economic policy.
6. Lender of Last Resort: IMF can be seen as lender of last resort. When a country is seeing an exit of currency because of a balance of payments crisis, the IMF can provide crucial loans so as to stabilise the economy and thus prevent a collapse of confidence.
