kulvir singh

8/4/2019 Kulvir Singh

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INTERNATIONAL MONETARY FUND

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BUSINESS ENVIRONMENT

ASSIGNMENT

ON

INTERNATIONAL MONETARY

FUND

SUBMITTED TO: SUBMITTED BY:

PRIYANKA KALIA KULVIR SINGH

10204190085


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CERTIFICATE

This is certify thatKULVIR SINGH

M.B.A. 2nd semester student

of INFOTECH COMPUTERS has done project on

"INTERNATIONAL MONETARY FUND" under the

guidance and supervision of Miss PRIYANKA KALIA .The

quality of work fairly fulfills all necessary requirement related to above

said course.

CENTRE HEAD SUPERVISED BY

(SATINDER SINGH SETHI) (PRIYANKA KALIA)


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ACKNOWLEDGEMENT

First of all we would like to thank Almighty God for giving us the

strength and courage to accomplish all tasks, big and small. And the will

power and patience in making this report possible. The research for this

report has enlightened us with the insight and knowledge to how

international economic organizations work. We would like to express

our sincere thanks to MISS. PRIYANKA KALIA, Project in charge , for

their valuable and never ending help contribution and positive criticism

and precious advice.

In the end we hope and pray that this report meets the criteria,

which we were asked to adhere to and you have a worthy time going

through it.

Thank you sincerely


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PREFACE

The International Monetary Fund (IMF) is an organization of 187countries, working to foster global monetary cooperation, secure

financial stability, facilitate international trade, promote high

employment and sustainable economic growth, and reduce poverty

around the world. The International Monetary Fund (IMF) is the

international organization that oversees the global financial system by

following the macroeconomic policies of its member-countries; in

particular those with an impact on exchange rate and the balance of

payments. It is an organization formed with a stated objective of

stabilizing international exchange rates and facilitating development. It

also offers highly leveraged loans, mainly to poorer countries. Its

headquarters are in Washington, D.C., United States. The IMF's primary

purpose is to ensure the stability of the international monetary

systemthe system of exchange rates and international payments that

enables countries (and their citizens) to buy goods and services from

each other. This is essential for sustainable economic growth and risingliving standards.


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INTERNATIONAL MONTARY

FUND

International Monetary Fund, Washington, D.C.


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TABLE OF CONTENT

TITLE page no.

INTRODUCATION 1 WHY WAR IT CREATED 2 OBJECTIVE 2 HISTORY OF IMF 3

MEMBERSHIP 9GOVERNANCE AND ORGANISATION 10MANAGEMENT 14WORK OF IMF 17WHERE DOSE IMF GETS ITS MONEY 20SPECIAL DRAWING RIGHT 21IMF MAIN BUSINESS 22ACHIEVEMENT OF IMF 24SHORTCOMINGS OF IMF 25IMF AND INDIA RELATION 27CONCLUSION 29BIBLIOGRAPHY 30APPENDIX 31


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INTRODUCTION

IMF: International Monetary Fund is the world's central organization for

international monetary cooperation. It is an organization in which almost all

countries of the world work together to promote the common goal. The IMF is an

independent international organization. It is a cooperative of 187 member

countries, whose objective is to promote world economic stability and growth. The

member countries are the shareholders of the cooperative, providing the capital of

the IMF through quota subscriptions. In return, the IMF provides its members with

macroeconomic policy advice, financing in times of balance of payments need, and

technical assistance and training to improve national economic management. Its

headquarters are in Washington, D.C., United States

The IMF is one of several autonomous organizations designated by the United

Nations (UN) as Specialized Agencies, with which the UN has established

working relationships.2 The IMF is a permanent observer at the UN. The work of

the IMF is of three main types. Surveillance involves the monitoring of economic

and financial developments, and the provision of policy advice, aimed especially at

crisis-prevention. The IMF also lends to countries with balance of payments

difficulties, to provide temporary financing and to support policies aimed at

correcting the underlying problems; loans to low-income countries are also aimed

especially at poverty reduction. Third, the IMF provides countries with technical

assistance and training in its areas of expertise. Supporting all three of these

activities is IMF work in economic research and statistics. In recent years, as part

of its efforts to strengthen the international financial system, and to enhance its

effectiveness at preventing and resolving crises, the IMF has applied both its

surveillance and technical assistance work to the development of standards and

codes of good practice in its areas of responsibility, and to the strengthening of

financial sectors. The IMF also plays an important role in the fight against money-laundering and terrorism.


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Why was it created?

The IMF was conceived in July 1944, when representatives of 45 governments

meeting in the town of Bretton Woods, New Hampshire, in the northeastern United

States, agreed on a framework for international economic cooperation. They

believed that such a framework was necessary to avoid a repetition of the

disastrous economic policies that had contributed to the Great Depression of the

1930s. During that decade, attempts by countries to shore up their failing

economiesby limiting imports, devaluing their currencies to compete against

each other for export markets, and curtailing their citizens' freedom to buy goods

abroad and to hold foreign exchangeproved to be self-defeating. World trade

declined sharply, and employment and living standards plummeted in many

countries. Seeking to restore order to international monetary relations, the IMF's

founders charged the new institution with overseeing the international monetary

system to ensure exchange rate stability and encouraging member countries to

eliminate exchange restrictions that hindered trade. The IMF came into existence

in December 1945, when its first 29 member countries signed its Articles of

Agreement. Since then, the IMF has adapted itself as often as needed to keep up

with the expansion of its membership187 countries as of June 2010and

changes in the world economy.

Objective

1) To promote international monetary co-operation through a permanentinstitution.

2) To facilitate the expansion and balanced growth of international trade and tocontribute there by to the promotion and maintenance of high level of

employment of the member countries.


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3) To promote exchange stability, to maintain orderly exchange arrangementamong member and to avoid competitive depreciation.

4) To assist in the establishment of multilateral system of payment in a respectof current transaction between member and in the elimination of foreignexchange restriction.

5) To give confidence to member by making the fund's resources available tothem under adequate sage guard, thus providing them with opportunity to

correct maladjustment in their balance of payments with out resorting to

measures destructive of national or international prosperity.

6) To shorten the duration and lessen the degree of disequilibrium in theinternational balance of payment of member.

The objective was to help member achieve high standardand sustainable economic growth and development, while eschewing the

beggar -thy- neighbor policies that had contributed to the great depression.

HISTORY

Cooperation and reconstruction (194471)

During the Great Depression of the 1930s, countries attempted to shore up their

failing economies by sharply raising barriers to foreign trade, devaluing their

currencies to compete against each other for export markets, and curtailing their

citizens' freedom to hold foreign exchange. These attempts proved to be self-

defeating. World trade declined sharply (see chart below), and employment and

living standards plummeted in many countries.

This breakdown in international monetary cooperation led the IMF's founders to

plan an institution charged with overseeing the international monetary systemthe

system of exchange rates and international payments that enables countries and

their citizens to buy goods and services from each other. The new global entity


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would ensure exchange rate stability and encourage its member countries to

eliminate exchange restrictions that hindered trade.

The Bretton Woods agreement

The IMF was conceived in July 1944, when representatives of 45 countriesmeeting in the town of Bretton Woods, New Hampshire, in the northeastern UnitedStates, agreed on a framework for international economic cooperation, to beestablished after the Second World War. They believed that such a framework wasnecessary to avoid a repetition of the disastrous economic policies that hadcontributed to the Great Depression.

The IMF came into formal existence in December 1945, when its first 29 membercountries signed its Articles of Agreement. It began operations on March 1, 1947.Later that year, France became the first country to borrow from the IMF.

The IMF's membership began to expand in the late 1950s and during the 1960s asmany African countries became independent and applied for membership. But theCold War limited the Fund's membership, with most countries in the Soviet sphereof influence not joining.

Par value system

The countries that joined the IMF between 1945 and 1971 agreed to keep theirexchange rates (the value of their currencies in terms of the U.S. dollar and, in thecase of the United States, the value of the dollar in terms of gold) pegged at ratesthat could be adjusted only to correct a "fundamental disequilibrium" in thebalance of payments, and only with the IMF's agreement. This par value systemalso known as the Bretton Woods systemprevailed until 1971, when the U.S.government suspended the convertibility of the dollar (and dollar reserves held byother governments) into gold.

The end of the Bretton Woods System (1972

81)By the early 1960s, the U.S. dollar's fixed value against gold, under the Bretton

Woods system of fixed exchange rates, was seen as overvalued. A sizable increase

in domestic spending on President Lyndon Johnson's Great Society programs and a

rise in military spending caused by the Vietnam War gradually worsened the

overvaluation of the dollar.


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End of Bretton Woods system

The system dissolved between 1968 and 1973. In August 1971, U.S. President

Richard Nixon announced the "temporary" suspension of the dollar's convertibility

into gold. While the dollar had struggled throughout most of the 1960s within the

parity established at Bretton Woods, this crisis marked the breakdown of the

system. An attempt to revive the fixed exchange rates failed, and by March 1973

the major currencies began to float against each other.

Since the collapse of the Bretton Woods system, IMF members have been free to

choose any form of exchange arrangement they wish (except pegging their

currency to gold): allowing the currency to float freely, pegging it to another

currency or a basket of currencies, adopting the currency of another country,participating in a currency bloc, or forming part of a monetary union.

Oil shocks

Many feared that the collapse of the Bretton Woods system would bring the period

of rapid growth to an end. In fact, the transition to floating exchange rates was

relatively smooth, and it was certainly timely: flexible exchange rates made it

easier for economies to adjust to more expensive oil, when the price suddenly

started going up in October 1973. Floating rates have facilitated adjustments toexternal shocks ever since.

The IMF responded to the challenges created by the oil price shocks of the 1970s

by adapting its lending instruments. To help oil importers deal with anticipated

current account deficits and inflation in the face of higher oil prices, it set up the

first of two oil facilities.

Helping poor countries

From the mid-1970s, the IMF sought to respond to the balance of paymentsdifficulties confronting many of the world's poorest countries by providing

concessional financing through what were known as the Trust Fund. In March

1986, the IMF created a new concessional loan program called the Structural

Adjustment Facility. The SAF was succeeded by the Enhanced Structural

Adjustment Facility in December 1987.


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Debt and painful reforms (198289)

The oil shocks of the 1970s, which forced many oil-importing countries to borrow

from commercial banks, and the interest rate increases in industrial countries trying

to control inflation led to an international debt crisis.

During the 1970s, Western commercial banks lent billions of "recycled"

petrodollars, getting deposits from oil exporters and lending those resources to oil-

importing and developing countries, usually at variable, or floating, interest rates.

So when interest rates began to soar in 1979, the floating rates on developing

countries' loans also shot up. Higher interest payments are estimated to have cost

the non-oil-producing developing countries at least $22 billion during 197881. At

the same time, the price of commodities from developing countries slumped

because of the recession brought about by monetary policies. Many times, the

response by developing countries to those shocks included expansionary fiscal

policies and overvalued exchange rates, sustained by further massive borrowings.

When a crisis broke out in Mexico in 1982, the IMF coordinated the global

response, even engaging the commercial banks. It realized that nobody would

benefit if country after country failed to repay its debts.

The IMF's initiatives calmed the initial panic and defused its explosive potential.

But a long road of painful reform in the debtor countries, and additional

cooperative global measures, would be necessary to eliminate the problem.

Societal Change for Eastern Europe and Asian Upheaval (1990-2004)

The fall of the Berlin wall in 1989 and the dissolution of the Soviet Union in 1991

enabled the IMF to become a (nearly) universal institution. In three years,

membership increased from 152 countries to 172, the most rapid increase since the

influx of African members in the 1960s.


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In order to fulfill its new responsibilities, the IMF's staff expanded by nearly 30

percent in six years. The Executive Board increased from 22 seats to 24 to

accommodate Directors from Russia and Switzerland, and some existing Directors

saw their constituencies expand by several countries.

The IMF played a central role in helping the countries of the former Soviet bloc

transition from central planning to market-driven economies. This kind of

economic transformation had never before been attempted, and sometimes the

process was less than smooth. For most of the 1990s, these countries worked

closely with the IMF, benefiting from its policy advice, technical assistance, and

financial support.

By the end of the decade, most economies in transition had successfully graduatedto market economy status after several years of intense reforms, with many joining

the European Union in 2004.

Asian Financial Crisis

In 1997, a wave of financial crises swept over East Asia, from Thailand to

Indonesia to Korea and beyond. Almost every affected country asked the IMF for

both financial assistance and for help in reforming economic policies. Conflicts

arose on how best to cope with the crisis, and the IMF came under criticism thatwas more intense and widespread than at any other time in its history.

From this experience, the IMF drew several lessons that would alter its responses

to future events. First, it realized that it would have to pay much more attention to

weaknesses in countries banking sectors and to the effects of those weaknesses on

macroeconomic stability. In 1999, the IMFtogether with the World Bank

launched the Financial Sector Assessment Program and began conducting national

assessments on a voluntary basis. Second, the Fund realized that the institutional

prerequisites for successful liberalization of international capital flows were moredaunting than it had previously thought. Along with the economics profession

generally, the IMF dampened its enthusiasm for capital account liberalization.

Third, the severity of the contraction in economic activity that accompanied the

Asian crisis necessitated a re-evaluation of how fiscal policy should be adjusted

when a crisis was precipitated by a sudden stop in financial inflows.


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Debt relief for poor countries

During the 1990s, the IMF worked closely with the World Bank to alleviate the

debt burdens of poor countries. The Initiative for Heavily Indebted Poor Countries

was launched in 1996, with the aim of ensuring that no poor country faces a debt

burden it cannot manage. In 2005, to help accelerate progress toward the United

Nations Millennium Development Goals (MDGs), the HIPC Initiative was

supplemented by the Multilateral Debt Relief Initiative (MDRI).

Globalization and the Crisis (2005 - present)

The IMF has been on the front lines of lending to countries to help boost the global

economy as it suffers from a deep crisis not seen since the Great Depression.

For most of the first decade of the 21st century, international capital flows fueled a

global expansion that enabled many countries to repay money they had borrowed

from the IMF and other official creditors and to accumulate foreign exchange

reserves.

The global economic crisis that began with the collapse of mortgage lending in the

United States in 2007, and spread around the world in 2008 was preceded by large

imbalances in global capital flows.Global capital flows fluctuated between 2 and 6 percent of world GDP during

1980-95, but since then they have risen to 15 percent of GDP. In 2006, they totaled

$7.2 trillionmore than a tripling since 1995. The most rapid increase has been

experienced by advanced economies, but emerging markets and developing

countries have also become more financially integrated.

The founders of the Bretton Woods system had taken it for granted that private

capital flows would never again resume the prominent role they had in the

nineteenth and early twentieth centuries, and the IMF had traditionally lent to

members facing current account difficulties.

The latest global crisis uncovered fragility in the advanced financial markets that

soon led to the worst global downturn since the Great Depression. Suddenly, the


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IMF was inundated with requests for stand-by arrangements and other forms of

financial and policy support.

The international community recognized that the IMFs financial resources were as

important as ever and were likely to be stretched thin before the crisis was over.

With broad support from creditor countries, the Funds lending capacity was

tripled to around $750 billion. To use those funds effectively, the IMF overhauled

its lending policies, including by creating a flexible credit line for countries with

strong economic fundamentals and a track record of successful policy

implementation. Other reforms, including ones tailored to help low-income

countries, enabled the IMF to disburse very large sums quickly, based on the needs

of borrowing countries and not tightly constrained by quotas, as in the past.

For more on the ideas that have shaped the IMF from its inception until the late

1990s, take a look at James Boughton's "The IMF and the Force of History: Ten

Events and Ten Ideas that Have Shaped the Institution."

MEMBERSHIPOriginal members

All those countries whose representative took part in BRETTEN WOODS

CONFERENCE and who agreed to be the member of the Fund prior to 31st

December 1945 , are called the original member of the Fund. All those who

become its member subsequently are called as the ordinary member of the Fund.

Other members

Membership shall be open to other countries at such times and in accordance with

such terms as may be prescribed by the Board of Governors. These terms,including the terms for subscriptions, shall be based on principles consistent with

those applied to other countries that are already members. Fund can terminates the

membership of such country as does not deserve its rules. In 1947, the number of

member-countries was 40, now there are 187 countries in the world are its member


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GOVERNANCE AND ORGANIZATION

The IMF's mandate and governance have evolved along with changes in the global

economy, allowing the organization to retain a central role within the international

financial architecture. The diagram below provides a stylized view of the IMF's

current governance structure.

Board of Governors

The Board of Governors is the highest decision-making body of the IMF. It

consists of one governor and one alternate governor for each member country. Thegovernor is appointed by the member country and is usually the minister of finance

or the head of the central bank.

While the Board of Governors has delegated most of its powers to the IMF's

Executive Board, it retains the right to approve quota increases, special drawing


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right (SDR) allocations, the admittance of new members, compulsory withdrawal

of members, and amendments to the Articles of Agreement and By-Laws.

The Board of Governors also elects or appoints executive directors and is the

ultimate arbiter on issues related to the interpretation of the IMF's Articles of

Agreement. Voting by the Board of Governors usually takes place by mail-in

ballot.

The Boards of Governors of the IMF and the World Bank Group normally meet

once a year, during the IMF-World Bank Spring and Annual Meetings, to discuss

the work of their respective institutions. The Meetings, which take place in

September or October, have customarily been held in Washington for two

consecutive years and in another member country in the third year.

The Annual Meetings usually include two days of plenary sessions, during which

Governors consult with one another and present their countries' views on current

issues in international economics and finance. During the Meetings, the Boards of

Governors also make decisions on how current international monetary issues

should be addressed and approve corresponding resolutions.

The Annual Meetings are chaired by a Governor of the World Bank and the IMF,

with the chairmanship rotating among the membership each year. Every two years,at the time of the Annual Meetings, the Governors of the Bank and the Fund elect

Executive Directors to their respective Executive Boards.

Ministerial Committees

The IMF Board of Governors is advised by two ministerial committees, the

International Monetary and Financial Committee (IMFC) and the Development

Committee.

The IMFC has 24 members, drawn from the pool of 187 governors. Its structuremirrors that of the Executive Board and its 24 constituencies. As such, the IMFC

represents all the member countries of the Fund.

The IMFC meets twice a year, during the Spring and Annual Meetings. The

Committee discusses matters of common concern affecting the global economy


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and also advises the IMF on the direction its work. At the end of the Meetings, the

Committee issues a joint communiqu summarizing its views. These communiqus

provide guidance for the IMF's work program during the six months leading up to

the next spring or Annual Meetings. There is no formal voting at the IMFC, whichoperates by consensus.

The Development Committee is a joint committee, tasked with advising the Boards

of Governors of the IMF and the World Bank on issues related to economic

development in emerging and developing countries. The committee has 24

members (usually ministers of finance or development). It represents the full

membership of the IMF and the World Bank and mainly serves as a forum for

building intergovernmental consensus on critical development issues.

The Executive Board

The IMF's 24-member Executive Board takes care of the daily business of the

IMF. Together, these 24 board members represent all 187 countries. Large

economies, such as the United States and China, have their own seat at the table

but most countries are grouped in constituencies representing 4 or more countries.

The largest constituency includes 24 countries.

The Board discusses everything from the IMF staff's annual health checks ofmember countries' economies to economic policy issues relevant to the global

economy. The board normally makes decisions based on consensus but sometimes

formal votes are taken. At the end of most formal discussions, the Board issues

what is known as a summing up, which summarizes its views. Informal discussions

may be held to discuss complex policy issues still at a preliminary stage.

Governance Reform

To be effective, the IMF must be seen as representing the interests of all its 187

member countries. For this reason, it is crucial that its governance structure reflect

todays world economy. In 2010, the IMF agreed wide-ranging governance

reforms to reflect the increasing importance of emerging market countries. The

reforms also ensure that smaller developing countries will retain their influence in

the IMF.


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MANAGEMENT

The IMF is led by a Managing Director, who is head of the staff and Chairman of

the Executive Board. He is assisted by a First Deputy Managing Director and twoother Deputy Managing Directors. The Management team oversees the work of the

staff, and maintains high-level contacts with member governments, the media, non-

governmental organizations, think tanks, and other institutions.

Managing Director: Duties and selection

According to the IMF's Articles of Agreement, the Managing Director "shall be

chief of the operating staff of the Fund and shall conduct, under the direction of the

Executive Board, the ordinary business of the Fund. Subject to the general controlof the Executive Board, he shall be responsible for the organization, appointment,

and dismissal of the staff of the Fund."

The IMF's Executive Board is responsible for selecting the Managing Director.

Any Executive Director may submit a nomination for the position, consistent with

past practice. When more than one candidate is nominated, as has been the case in

recent years, the Executive Board aims to reach a decision by consensus.

THE CURRENT MANAGEMENT TEAM


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Managing Director, Christine Lagarde, a French national, joined the IMF as

Managing Director in July 2011. Before coming to the IMF, she was France's

Minister for Economy, Finance and Industry.

First Deputy Managing Director, John Lipsky, an American, has been First Deputy

Managing Director since September 2006. Before coming to the IMF, he worked

for JPMorgan Investment Bank.

Naoyuki Shinohara, a Japanese national, joined the IMF as Deputy Managing

Director in March 2010. Previously, he was Japan's Vice-Minister of Finance for

International Affairs.
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Nemat Shafik, from Egypt, became Deputy Managing Director of the IMF in

April, 2011. Previously she had worked at the U.K. Department for International

Development (DFID), the World Bank, and the International Finance Corp.

Min Zhu, from China, joined the IMF as Special Advisor to the Managing Director

in May 2010. On July 26, 2011 he became Deputy Managing Director. Beforecoming to the IMF, Min Zhu was a Deputy Governor of the Peoples Bank of

China and previously worked at the World Bank.

David Lipton, of the United States, joined the IMF on July 26, 2011 as a Special

Advisor to the Managing Director. Prior to joining the Fund, Lipton served as

Special Assistant to the President and as Senior Director for International

Economic Affairs at the U.S. National Economic Council and U.S. NationalSecurity Council at the White House.


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WORKS OF INTERNATIONAL MONETARY

FUND

The IMF's primary purpose is to ensure the stability of the international monetary

systemthe system of exchange rates and international payments that enables

countries (and their citizens) to transact with one other. This system is essential for

promoting sustainable economic growth, increasing living standards, and reducing

poverty. Following the recent global crisis, the Fund has been clarifying and

updating its mandate to cover the full range of macroeconomic and financial sector

issues that bear on global stability

Surveillance: To maintain stability and prevent crises in the international monetarysystem, the IMF reviews country policies, as well as national, regional, and global

economic and financial developments through a formal system known as

surveillance. Under the surveillance framework, the IMF provides advice to its 187

member countries, encouraging policies that foster economic stability, reduce

vulnerability to economic and financial crises, and raise living standards. It

provides regular assessment of global prospects in its World Economic Outlook,

financial markets in its Global Financial Stability Report, and public finance

developments in its Fiscal Monitor, and publishes a series of regional economic

outlooks. The Funds Executive Board has been considering a range of options to

enhance multilateral, financial, and bilateral surveillance, and better integrate the

three.

Financial assistance: IMF financing provides member countries the breathing room

they need to correct balance of payments problems. A policy program supported by

IMF financing is designed by the national authorities in close cooperation with the

IMF, and continued financial support is conditioned on effective implementation of

this program. In an early response to the recent global economic crisis, the IMFstrengthened its lending capacity and approved a major overhaul of the

mechanisms for providing financial support in April 2009, with further reforms

adopted in August 2010.

In the most recent reforms, IMF lending instruments were improved further to

provide flexible crisis prevention tools to a broad range of members with sound


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fundamentals, policies, and institutional policy frameworks. In low-income

countries, the IMF doubled loan access limits and is boosting its lending to the

worlds poorer countries, with interest rates set at zero until 2012.

Technical assistance: The IMF offers technical assistance and training to help

member countries strengthen their capacity to design and implement effective

policies. Technical assistance is offered in several areas, including tax policy and

administration, expenditure management, monetary and exchange rate policies,

banking and financial system supervision and regulation, legislative frameworks,

and statistics.

key IMF activity

The IMF lends to member countries that have temporary balance of paymentproblem. The IMF does not lend for specific purpose or project. The

Financial assistance provided by the IMF enables the member to reduce its

reserve or to make larger payment for imports and other external purpose.

When a country becomes member of the Fund, it has to declare par value ofits currency in terms of dollar or gold. This facilities multilateral convertible

of that currency.

Fund also allows its member the facility of making changes in theirexchange rate. Any country can change the par value of its currency by 10%

after notifying the Fund. If the country was to make 20% change in its par

value , it must seeks prior approval of the Fund. In such a case , the Fund

has to communicate its decision within 72 hours. In case larger change than

20 % , the Fund requires more time to take its decision. Such decision is

taken by two-third of the member. The Fund can change, by a majoritydecision , par value of all countries by a given proportion.

When a country has an adverse balance of payments , the fund gives theforeign currency required by the said country , on loan at a fixed rate of

exchange . it enable the country to discharge liability .such loan are of short

duration


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The fund buys and sells the currency of the member countries. Whenever acountry buys the currency of another country from the fund . the later makes

it available by purchasing the same from the country concerned , of which

it constitutes the national currency . however in ny one year a membercountry can purchase from the fund foreign currency up to the maximum

of 15 % of its quota

the fund is called the bank of central bank of the central banks of differentcountries of the world just as a central bank holds the cash reserve of the

commercial banks of the country , likewise IMF also mobilize resources of

the central bank of the member countries

the fund also provide technical assistance to its member countries the fundsends its experts on deputation to member countries to advise them on thematter like exchange control , foreign payments credit money , central

banking and economic policy etc. The Fund also publishes many technical

journals and magazines.

It also imparts training to the representative of member countries. Thistraining is imported to the senior officers of the central banks and Finance

Departments. In 1975, a training centre was set up.

Although IMF is opposed to any sort of control either on foreign exchangeor foreign trade , yet member countries have been given the right to resort tothese controls during emergency in the hope that they will lift it as early as

the situation warranted.

There is the possibility on the part of the debtor country to buy foreigncurrencies in exchange for its own currency. It may cause the supply of such

currencies to increase with the Fund as have no demand and deplete the

supply of such currencies as are in great demand. Hence for maintaining the

liquidity of resources three provision have been made (1) when a member

country wants to do buy any foreign currency in exchange for gold, it can doso. (2) when Fund has the currency of a member country excess of its quota ,

the latter can buy back the surplus currency by making payment in gold. (3)

Every member country is required to buy a part of its currency lying with the

Fund every year in return for gold or securities.


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Where does the IMF get its money?

The IMF's resources come mainly from the quotas that countries deposit when they

join the IMF. Quotas broadly reflect the size of each member's economy: the larger

a country's economy in terms of output, and the larger and more variable its trade,

the larger its quota tends to be. For example, the United States, the world's largest

economy, has the largest quota in the IMF. Quotas are reviewed periodically and

can be increased when deemed necessary by the Board of Governors. Countries

deposit 25 percent of their quota subscriptions in Special Drawing Rights or major

currencies, such as U.S. dollars or Japanese yen. The IMF can call on the

remainder, payable in the member's own currency, to be made available for lending

as needed.

Quotas, together with the equal number of basic votes each member has, determine

countries' voting power. Quotas also help to determine the amount of financing

countries can borrow from the IMF, and their share in SDR allocations. Most IMF

loans are financed out of members' quotas. The exceptions are loans under the

Poverty Reduction and Growth Facility, which are paid out of trust funds

administered by the IMF and financed by contributions from the IMF itself and a

broad spectrum of its member countries. If necessary, the IMF may borrow from a

number of its financially strongest member countries to supplement the resources

available from its quotas. It has done so on several occasions when borrowing

countries needed large amounts of financing and a failure to help them might have

put the international monetary system at risk. Like other financial institutions, the

IMF also earns income from the interest charges and fees levied on its loans. It

uses this income to meet funding costs, pay for administrative expenses, and

maintain precautionary balances. In the early 2000s, there was a decline in the

demand for the IMF's no concessional loans, reflecting benign global economic

and financial conditions as well as policies in many emerging market countries thathad reduced their vulnerability to crises. To diversify its income sources, the IMF

established an investment account in 2005. The funds in the account are invested in

eligible marketable obligations denominated in SDRs or in the securities of

members whose currencies are included in the SDR basket. The Fund also began to

explore other options for reducing its dependence on lending for its income.


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Special Drawing Right (SDR)

The Special Drawing Right (SDR) is an international reserve asset, created by the

IMF in 1969 to supplement the existing official reserves of member countries.

The SDR is neither a currency, nor a claim on the IMF. Rather, it is a potential

claim on the freely usable currencies of IMF members. Holders of SDRs can

obtain these currencies in exchange for their SDRs in two ways: first, through the

arrangement of voluntary exchanges between members; and second, by the IMF

designating members with strong external positions to purchase SDRs from

members with weak external positions. In addition to its role as a supplementary

reserve asset, the SDR serves as the unit of account of the IMF and some other

international organizations.

In addition to its role as a supplementary reserve asset, the SDR serves as the unit

of account of the IMF and some other international organizations.

SDRs value

The value of the SDR is based on a basket of key international currenciesthe

euro, Japanese yen, pound sterling and U.S. dollar. The U.S. dollar-value of the

SDR is posted daily on the IMFs website. The basket composition is reviewedevery five years by the Executive Board to ensure that it reflects the relative

importance of currencies in the worlds trading and financial systems.

The SDR interest rate provides the basis for calculating the interest charged to

members on regular (no concessional) IMF loans, the interest paid and charged to

members on their SDR holdings, and the interest paid to members on a portion of

their quota subscriptions. The SDR interest rate is determined weekly and is based

on a weighted average of representative interest rates on short-term debt in the

money markets of the SDR basket currencies.

SDR allocations to IMF members

Under its Articles of Agreement, the IMF may allocate SDRs to members in

proportion to their IMF quotas, providing each member with a costless asset.

However, if a members SDR holdings rise above its allocation, it earns interest on


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the excess; conversely, if it holds fewer SDRs than allocated, it pays interest on the

shortfall.

There are two kinds of allocations

General allocations of SDRs. General Allocations have to be based on a long-

term global need to supplement existing reserve assets. Decisions to allocate SDRs

have been made three times: in 1970-72, for SDR 9.3 billion; in 197981, for SDR

12.1 billion; and in August 2009, for an amount of SDR 161.2 billion.

Special allocations of SDRs. A special one-time allocation of SDRs through the

Fourth Amendment of the Articles of Agreement was implemented in September

2009. The purpose of this special allocation was to enable all members of the IMF

to participate in the SDR system on an equitable basis and correct for the fact that

countries that joined the Fund after 1981more than one-fifth of the current IMF

membershiphad never received an SDR allocation.

With the general SDR allocation of August 2009 and the special allocation of

September 2009, the amount of SDRs increased from SDR 21.4 billion to SDR

204.1 billion (currently equivalent to about $317 billion).

The IMF's main businessMacroeconomic and financial sector policies In its oversight of member countries,

the IMF focuses on the following:

Macroeconomic policies relating to the government's budget, the management

of money and credit, and the exchange rate;

Macroeconomic performancegovernment and consumer spending, business

investment, exports and imports, output (GDP), employment, and inflation;

Balance of paymentsthat is, the balance of a country's transactions with the rest

of the world;

Financial sector policies, including the regulation and supervision of banks and

other financial institutions; and


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Structural policies that affect macroeconomic performance, such as those

governing labor markets, the energy sector, and trade.

The IMF advises members on how they might improve their policies in these areas

so as to achieve higher rates of employment, lower inflation, and sustainable

economic growth. How does the IMF help poor countries?

Most of the IMF's loans to low-income countries are made on concessional terms,

under the Poverty Reduction and Growth Facility. They are intended to ease the

pain of the adjustments these countries need to make to bring their spending into

line with their income and to promote reforms that foster stronger, sustainable

growth and poverty reduction. An IMF loan also encourages other lenders and

donors to provide additional financing, by signaling that a country's policies areappropriate. The IMF is not a development institution. It does notand, under its

Articles of Agreement, it cannotprovide loans to help poor countries build their

physical infrastructure, diversify their export or other sectors, or develop better

education and health care systems. This is the job of the World Bank and the

regional development banks. Some low-income countries neither want nor need

financial assistance from the IMF, but they do want to be able to borrow on

affordable terms in international capital markets or from other lenders In 2005, the

finance ministers and heads of government of the G-8 countries (Canada, France,Germany, Italy, Japan, Russia, the United Kingdom, and the United States)

launched the Multilateral Debt Relief Initiative (MDRI), which called for the

cancellation of the debts owed to the IMF, the International Development

Association of the World Bank Group, and the African Development Fund by all

HIPC countries that qualify for debt reduction under the HIPC Initiative. The IMF

implemented the MDRI in January 2006 by canceling the debt owed to it by 19

countries. Most of the cost is being borne by the IMF itself, with additional funds

coming from rich member countries to ensure that the IMF's lending capacity is not

compromised. To ensure that developing countries reap full benefit from the loans

and debt relief they receive, in 1999 the IMF and the World Bank introduced a

process known as the Poverty


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Reduction Strategy Paper (PRSP) process. To qualify for loans under the Poverty

Reduction and Growth Facility and debt relief under the HIPC Initiative, countries

must draw up their own strategies for reducing poverty, with input from civil

society. The IMF and the World Bank provide an assessment of the strategies, butthe latter are "owned" by the countries that formulate them. Economic growth

rising average incomeis necessary for the sustained reduction of poverty, and a

considerable body of research has shown that international trade stimulates growth.

Developing countries face many obstacles, however, to expanding their trade with

other countries. Access to the industrial countries' markets is restricted by barriers

such as tariffs and quotas, and developing countries themselves have barriers that

prevent them from trading with each other. The IMF and the World Bank have

been urging their members for years to eliminate barriers to trade. Even if theiraccess to other markets is increased, however, many developing countries may not

be able to benefit from trade opportunities. Their export sectors may be weak

because of policies that discourage investment or trade, and they may lack

appropriate institutions (like customs administration) and infrastructure (for

example, electricity to run plants, and roads and ports to get products to markets).

In 2005, the IMF and the World Bank introduced the concept of Aid for Trade for

the least developed countries. Aid for Trade includes analysis, policy advice, and

financial support. The IMF provides advice to countries on such issues as the

modernization of customs administration, tariff reform, and the improvement of

tax collection to compensate for the loss of tariff revenues that may follow trade

liberalization. The IMF also participates in the Integrated Framework for Trade-

Related Technical Assistance, a multi-agency, multi-donor program that helps the

least developed countries by identifying impediments to their participation in the

global economy and coordinating technical assistance from different sources.

ACHIEVEMENTS OF IMF

One of the main objectives of the Fund was to present a forum where mostof the countries of world may be able to solve their monetary problem by

mutual cooperation.


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Because of the effort of the Fund rich countries like America gave liberaleconomics assistance under Marshall Plan for the reconstruction of

European countries.

At the time of the establishment of the Fund, almost all the countries werepracticing exchange control in one way or the other. There were many

restrictions on the foreign trade. IMF has succeeded in reducing the same

and in establishing multilateral system of foreign payment

corresponding to increase the international trade, the fund has succeeded inincreasing liquidity .On the other hand , the fund has increased its resources

from 2920 cr. SDRs to 21200 cr. SDRs on the other hand it has created a

new liquid assert in form of SDR. As a result of it international liquidity has

increased manifold. The funds has succeeded in expanding the international trade and marketing

it free from restriction to a large extend . It has rendered payments relating

to international trade easy . by helping the countries suffering from trade

disequilibrium , it has promoted their trade. All this has resulted into

expanding the value of world's export from 53 billion dollars in 1948 to

more than 2000 billion dollars at present.

The fund has done a special service to developing countries in finding asolution to their problems . it has been actively helping them in theirunfavourable balance of payments and achieving monetary stability .

These countries have been receiving adequate assistance from the fund n

determining their monetary , export import and exchange policies . it has

provided technical assistance to them besides imparting training to their

senior officers

The fund has come the rescue of all member countries faced with economiccrisis. On account of hike in petrol prices many countries of the world

experience acute shortage of foreign exchange. In order to ease thissituation, it set up Petrol Facility Fund.

SHORTCOMINGS OF IMF

The fund has failed to achieve its main objective of exchange rate stability.It succeeded till 1971 in maintaining fixed rate of exchange. Thereafter, it


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becomes variable once again. Lack of stability in exchange rate is the major

failure of the fund. At present, rate of exchange is determined by market

force of demand and supply.

Many efforts were made by the IMF to bring stability in price of gold but itfailed miserably. Up to 1971, the price of gold was kept stable at $35 per oz

but thereafter it has increased manifold.

The IMF has giving loan only for meeting temporary balance of paymentdeficit. It provides no loans for development projects to promote

development.

The IMF has failed to remove restriction on foreign trade and control onforeign exchange. Many countries of the world have resorted to policy of

protection with greater vigour. Critics say that International Monetary Fund is club of rich countries. It

works at the behest of rich countries like America Britain etc. and helps their

supporters. It pursues a policy of discrimination.

IMF is not proper solution of problem of international liquidity. AlthoughIMF has considerably increased its permanent resources and help in problem

of the creation of new currency in the form of Special Drawing Rights

(SDR's), yet the problem of liquidity persists. Consequently it will be

difficult for the fund to lend resources to developing countries and help themovercome their balance of payment deficit.

While providing loans, IMF imposes many condition on member nation e.g.reduction in the growth rate of money supply measures to control wages,

salaries and prices, devaluation , reduction in fiscal deficit , etc. It results in

excessive interference of IMF in the working of domestic economics of

member nations.

In the year 1971, a global monetary crisis triggered off when America notonly devalued dollars but also stopped its convertibility into gold. The fundfailed to resolve this crisis.

Developing countries have not gained much from IMF. In 1990, 70% ofSDRs were distributed to 26 rich countries and remaining 30% of SDRs

were distributed to other member nation of the world.


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IMF and India Relations

India is among one of the developing economies that effectively employed the

various Fund programs to fortify its fiscal structure. Through productive

engagement with the IMF, India formulated a consistent approach to expand

domestic and global assistance for economic reforms. Whenever India underwent

balance of payments crises, it sought the help of IMF and in turn the internationally

recognized reserve willingly helped India to overcome the difficulties. Recently,

India purchased IMF gold to lend money to developing countries. This proves that

the fiscal reforms set in motion by the previous finance ministers have finally

started gaining momentum, transforming India from fiscal borrower to major

lender. The speed at which the gold was purchased by India on September 18,2009 astonished the market observers, who later considered it as a smart move

towards shoring its bullion funds and steadily trying to stake on the US dollar.

Some analysts predict that India is purchasing gold to move forward for higher

voting share in the IMF. India is also seeking for a considerable say in global fiscal

affairs and greater account in the IMF.The Reserve Bank of India forfeited USD

1,045/ ounce of yellow metal paying the amount in hard exchange and not in the

IMF's internal division of account

IMF 2010-11 prediction of Indian Economy

The International Monetary Fund (IMF) predicted 8% expansion during 2010-11.

However, the growth will be affected by high inflation and increasing monetary

deficit in the concerned fiscal year.

India's long term economic prospects will continue to remain sturdy in 2010-11

followed by lower growth rate at 7.7% for the FY 2011-12. Other than highinflation and rising financial deficit, the major areas of concern are rise in asset

cost and the prospects of an unanticipated slowdown in the influx of foreign

investment in India caused due by the chaos in worldwide financial markets.


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International Monetary Fund and India


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CONCLUSION

Strengthening the monitoring of global, regional, and country economies The IMF

has taken several steps to improve economic and financial surveillance, which is its

framework for providing advice to member countries on macroeconomic policies .

It is emphasizing research into the links between the financial sector and the real

economy and the sharing of cross-country experiences and it is improving its

ability to warn member countries of risks and vulnerabilities in their economies.


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BIBLOGRAPHY

1. www. imf.org2.

finsys update3. The Hindu Businessline.Com

4. Inquirer.net5. Business Economics -by sultan chand6. Business World magazine7. Modern Economic Theroy by sultan chand8. Business Environment by TR Jain and Mukesh Trehan


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APPENDIX

Fast Facts on the IMF

Membership: 187 countries Headquarters: Washington, D.C. Executive Board: 24 Directors representing countries or groups of countries Staff: Approximately 2,500 from 160 countries Total quotas: US$376 billion (as of 5/25/11) Additional pledged or committed resources: US$600 billion Loans committed (as of 5/25/11): US$280 billion, of which US$215 billion

have not been drawn (see table)

Biggest borrowers (amount agreed as of 5/25/11): Greece, Portugal, Ireland Biggest precautionary loans (amount agreed as of 5/25/11): Mexico, Poland,

Colombia

Surveillance consultations: Consultations concluded for 120 countries inFY2010 and for 88 countries in FY2011 as of 02/11/11

Technical assistance: Field delivery in FY2010192.5 person years Transparency: In 2009, over 90 percent of Article IV and program-related

staff reports and policy papers were published

Original aims: Article I of the Articles of Agreement sets out the IMFsgoals:

promoting international monetary cooperation; facilitating the expansion and balanced growth of international trade; promoting exchange stability; assisting in the establishment of a multilateral system of payments.


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List of Members

Last Updated: April 19, 2011

The International Monetary Fund (IMF) is an organization of 187 countries, working to foster global monetary

cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic

growth, and reduce poverty around the world.

Membership of the IMF(Date of entry into force: December 27, 1945)

Chronological List(187 Member Countries)

Member Effective Date of Membership

Belgium1 December 27, 1945

Bolivia1 December 27, 1945

Canada1 December 27, 1945

China1 December 27, 1945

Colombia1 December 27, 1945

(Czechoslovakia)1,2,3 (December 27, 1945)

Egypt1 December 27, 1945

Ethiopia1 December 27, 1945

France1 December 27, 1945

Greece1 December 27, 1945

Honduras1 December 27, 1945

Iceland1 December 27, 1945

India1 December 27, 1945

Iraq1 December 27, 1945

Luxembourg1 December 27, 1945

Netherlands1 December 27, 1945

Norway1 December 27, 1945


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Philippines1 December 27, 1945

South Africa1 December 27, 1945

United Kingdom1 December 27, 1945

United States1 December 27, 1945

(Yugoslavia)1,4,5 (December 27, 1945)

Dominican Republic1 December 28, 1945

Ecuador1 December 28, 1945

Guatemala1 December 28, 1945

Paraguay1 December 28, 1945

Iran, Islamic Republic of (Iran)1 December 29, 1945

Chile1 December 31, 1945

Mexico1 December 31, 1945

Peru1 December 31, 1945

Costa Rica1 January 8, 1946

(Poland)1, 6 (January 10, 1946)

Brazil1 January 14, 1946

Uruguay1 March 11, 1946

(Cuba)1, 7 (March 14, 1946)

El Salvador8 March 14, 1946

Nicaragua8 March 14, 1946

Panama8 March 14, 1946

Denmark8 March 30, 1946

Venezuela, Repblica Bolivariana de8

December 30, 1946

Turkey March 11, 1947

Italy March 27, 1947

Syrian Arab Republic (Syria) April 10, 1947

Lebanon April 14, 1947


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Australia August 5, 1947

Finland January 14, 1948

Austria August 27, 1948

Thailand (Siam) May 3, 1949

Pakistan July 11, 1950

Sri Lanka (Ceylon) August 29, 1950

Sweden August 31, 1951

Myanmar (Burma) January 3, 1952

Japan August 13, 1952

Germany August 14, 1952

Jordan August 29, 1952

Haiti September 8, 1953

(Indonesia)9 (April 15, 1954)

Israel July 12, 1954

Afghanistan, Islamic Rep. of (Afghanistan) July 14, 1955

Korea August 26, 1955

Argentina September 20, 1956

Vietnam (Viet Nam) September 21, 1956

Ireland August 8, 1957

Saudi Arabia August 26, 1957

Sudan September 5, 1957

Ghana September 20, 1957

Malaysia (Malaya) March 7, 1958

Tunisia April 14, 1958

Morocco April 25, 1958

Spain September 15, 1958

Libya September 17, 1958


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Portugal March 29, 1961

Nigeria March 30, 1961

Lao People's Democratic Republic (Laos) July 5, 1961

New Zealand August 31, 1961

Nepal September 6, 1961

Cyprus December 21, 1961

Liberia March 28, 1962

Togo August 1, 1962

Senegal August 31, 1962

Somalia August 31, 1962

Sierra Leone September 10, 1962

Tanzania (Tanganyika) September 10, 1962

Kuwait September 13, 1962

Jamaica February 21, 1963

Cte d'Ivoire (Ivory Coast) March 11, 1963

Niger April 24, 1963

Burkina Faso (Upper Volta) May 2, 1963

Cameroon July 10, 1963

Central African Republic July 10, 1963

Chad July 10, 1963

Congo, Republic of July 10, 1963

Benin (Dahomey) July 10, 1963

Gabon September 10, 1963

Mauritania September 10, 1963

Trinidad and Tobago September 16, 1963

Madagascar (Malagasy Republic) September 25, 1963

Algeria September 26, 1963


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Mali September 27, 1963

Uganda September 27, 1963

Burundi September 28, 1963

Congo, Democratic Republic of the (Zare) September 28, 1963

Guinea September 28, 1963

Rwanda September 30, 1963

Kenya February 3, 1964

Malawi July 19, 1965

Zambia September 23, 1965

Singapore August 3, 1966

Guyana September 26, 1966

Indonesia9 February 21, 1967

Gambia, The September 21, 1967

Botswana July 24, 1968

Lesotho July 25, 1968

Malta September 11, 1968

Mauritius September 23, 1968

Swaziland September 22, 1969

(Yemen, People's Democratic

Republic of (Southern Yemen))10 (September 29, 1969)

Equatorial Guinea December 22, 1969

Cambodia December 31, 1969

(Yemen Arab Republic)10

(May 22, 1970)

Barbados December 29, 1970

Fiji May 28, 1971

Oman December 23, 1971

Samoa (Western Samoa) December 28, 1971


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Bangladesh August 17, 1972

Bahrain September 7, 1972

Qatar September 8, 1972

United Arab Emirates September 22, 1972

Romania December 15, 1972

Bahamas, The August 21, 1973

Grenada August 27, 1975

Papua New Guinea October 9, 1975

Comoros September 21, 1976

Guinea-Bissau March 24, 1977

Seychelles June 30, 1977

So Tom and Prncipe September 30, 1977

Maldives January 13, 1978

Suriname April 27, 1978

Solomon Islands September 22, 1978

Cape Verde November 20, 1978

Dominica December 12, 1978

Djibouti December 29, 1978

St. Lucia November 15, 1979

St. Vincent and the Grenadines December 28, 1979

Zimbabwe September 29, 1980

Bhutan September 28, 1981

Vanuatu September 28, 1981

Antigua and Barbuda February 25, 1982

Belize March 16, 1982

Hungary May 6, 1982

St. Kitts and Nevis August 15, 1984


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Mozambique September 24, 1984

Tonga September 13, 1985

Kiribati June 3, 1986

Poland1,6 June 12, 1986

Angola September 19, 1989

Yemen, Republic of10 May 22, 1990 7

(Czechoslovakia)1,2,3 (September 20, 1990)

Bulgaria September 25, 1990

Namibia September 25, 1990

Mongolia February 14, 1991

Albania October 15, 1991

Lithuania April 29, 1992

Georgia May 5, 1992

Kyrgyz Republic (Kyrgyzstan) May 8, 1992

Latvia May 19, 1992

Marshall Islands May 21, 1992

Estonia May 26, 1992

Armenia May 28, 1992

Switzerland May 29, 1992

Russian Federation June 1, 1992

Belarus July 10, 1992

Kazakhstan July 15, 1992

Moldova August 12, 1992

Ukraine September 3, 1992

Azerbaijan September 18, 1992

Uzbekistan September 21, 1992

Turkmenistan September 22, 1992


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San Marino September 23, 1992

Bosnia and Herzegovina5 December 14, 1992

Croatia5 December 14, 1992

Macedonia, former Yugoslav Republic of5 December 14, 1992

Slovenia5 December 14, 1992

Serbia5 December 14, 1992

Czech Republic3 January 1, 1993

Slovak Republic3 January 1, 1993

Tajikistan April 27, 1993

Micronesia, Federated States of June 24, 1993

Eritrea July 6, 1994

Brunei Darussalam October 10, 1995

Palau December 16, 1997

Timor-Leste (East Timor) July 23, 2002

Montenegro5 January 18, 2007

Kosovo June 29, 2009

Tuvalu June 24, 2010

Tuvalu June 24, 2010

1"Original members" (Article II, Section 1), which signed the Articles of

Agreement by December 31, 1945. Costa Rica, Poland, Brazil, Uruguay, and

Cuba signed the Articles by that date but their membership became effective

upon deposit of their respective instruments of acceptance.2Czechoslovakia became a member of the Fund on December 27, 1945 and

ceased to be a member, effective December 31, 1954; Czechoslovakia was

readmitted as a member of the Fund on September 20, 1990, and ceased to bea member, effective January 1, 1993.3The Czech Republic and the Slovak Republic succeeded to the membership

of Czechoslovakia on

January 1, 1993.4

The Socialist Federal Republic of Yugoslavia ceased to be a member,

effective December 14, 1992.


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5Croatia (on January 15, 1993), Slovenia (on January 15, 1993), the former

Yugoslav Republic of Macedonia (on April 21, 1993), Bosnia and

Herzegovina (on December 20, 1995), and the Federal Republic of

Yugoslavia (on December 20, 2000) succeeded to the membership in theFund of the former Socialist Federal Republic of Yugoslavia, in each case,

effective December 14, 1992. The Federal Republic of Yugoslavia was later

renamed Serbia and Montenegro. In June 2006, Serbia and Montenegro,

separated to become the Republic of Serbia and the Republic of Montenegro.

Serbia succeeded to the membership of Serbia and Montenegro.6

Poland became a member of the Fund on January 10, 1946 and withdrew

from membership, effective

March 14, 1950; Poland was readmitted as a member of the Fund on June

12, 1986.

7Cuba withdrew from the Fund, effective April 2, 1964.8Countries that joined the Fund under the provisions for original members as

extended to December 31, 1946 by Board of Governors Resolution IM-9.9

Indonesia became a member of the Fund on April 15, 1954 and withdrew

from membership, effective August 17, 1965; Indonesia was readmitted as a

member of the Fund on February 21, 1967.10

The Republic of Yemen succeeded to the membership of the Yemen Arab

Republic and of the People's Democratic Republic of Yemen on May 22,

1990.

kulvir singh

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