BUS357 Week 3 Discussion 2 International Monetary Fund (IMF)

Intended to foster international monetary cooperation, exchange rate stability, and long-term economic prosperity, the International Monetary Fund has been around since 1944. The International Monetary Fund provides financial support and policy advice to its member countries to help them fix problems with their balance of payments and promote economic stability. To further aid its member states in bettering their financial status, it funds economic research, analysis, and initiatives that enhance their economic management and policy capacities. The International Monetary Fund uses Special Drawing Rights, a form of currency. SDRs are special drawing rights, an international reserve asset issued by the IMF to its member countries. To meet liquidity needs, IMF member countries swap SDRs with one another in exchange for freely usable currencies. This is done so that the goals of the International Monetary Fund can be attained. In 1976, parties reached an agreement on what is now known as the “Jamaica Agreement,” also known as the “Second Amendment to the IMF’s Articles of Agreement.” What followed was a shift in the IMF’s mission from protecting fixed exchange rates to promoting stable exchange rates and economic adjustment (International Monetary Fund. 2020). The agreement allowed its members to choose their currency exchange rate system and attempted to improve international cooperation in managing the global monetary system.

On the IMF’s video page, I saw a clip titled “What is the IMF?” It concisely explained the International Monetary Fund and how it helps its member countries deal with economic issues. I checked out the paper titled “popular data latest update” on the IMF’s data page to learn more about the current state of the global financial system. Numerous countries were experiencing fiscal deficits, mounting debt, and sluggish economic growth. The IMF’s provision of financial help and advice on monetary policy to its member countries during this time was crucial to their economic recovery and stability. If I were to give an account of the state of the international monetary system right now, I would cite reliable, up-to-date sources (Ratna Sahay. et al., 2020). Insights into the current state of the global economy and the IMF’s role in resolving economic difficulties can be gleaned from, for example, papers and analyses produced by financial institutions like the World Bank, central banks, and other recognized economic research organizations.

References

International Monetary Fund. (2020) “Reaching Households in Emerging and Developing Economies: Citizen ID, Socioeconomic Data, and Digital Delivery.” Special Series on Fiscal Policies to Respond to COVID-19, Washington, DC.

Khera, Purva, Stephanie Ng, Sumiko Ogawa, and Ratna Sahay. (2020) “Can FinTech Unlock Financial Inclusion in Emerging and Developing Economies?” IMF Working Paper, International Monetary Fund, Washington, DC.

Lashitew, Addisu A., Rob van Tulder, and Yann Liasse. (2019) “Mobile Phones for Financial Inclusion: What Explains the Diffusion of Mobile Money Innovations?” Research Policy 48 (5): 1201–15.