1. The International Monetary Fund (IMF) is an organization of 188 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. 1. WHAT THEY DO ? 2. HOW THEY DO ? 3. MEMBERSHIP 4. COLLABORATION WITH OTHER COUNTRIES

2. Organization & Finances 1. MANAGEMENT 2. STAFF OF INTERNATIONAL CIVIL SERVANTS 3. QUOTAS 4. SPECIAL DRAWING RIGHTS 5. GOLD 6. BORROWING ARRANGEMENTS 3. The IMF has played a part in shaping the global economy since the end of World War II. 1. Cooperation and reconstruction (194471) 2. The end of the Bretton Woods System (197281) 3. Debt and painful reforms (198289) 4. Societal Change for Eastern Europe and Asian Upheaval (1990 2004) 5. Globalization and the Crisis (2005 - present) 4. 1. Governance structure 2. Country representation 3. Accountability 5. 1. Board of directors 2. Ministerial committees 3. The executive board 4. Governance reforms 6. 1. Giving more say to emerging markets 2. Protecting the voice of low-income countries 3. Timeline for implementing the reform 7. 1. Engagement with intergovernmental groups 2. Civil society, think tanks, and the media 3. Internal watchdog 4. Ethics office and code of conduct 5. Transparency 8. 1. Stepping up crisis lending 2. A partner in Europe 3. Supporting low-income countries 4. Reinforcing multilateralism 5. Strengthening the international monetary system 6. Implementing organizational changes 9. When can a country borrow from IMF ? Process of Borrowing 10. Types of Loans Concessional Loans Extended Credit Facility Standby Credit facility Rapid Credit Facility Non Concessional Loans Standby Arrangements Flexible Credit Line Precautionary & Liquidity Line Emergency Assistance Rapid Financing Instrument 11. Quota Gold Holdings Borrowing Arrangements (NAB & GAB) 12. The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries' official reserves. Its value is based on a basket of four key international currencies, and SDRs can be exchanged for freely usable currencies. SDRs are denoted with the currency code XDR. 13. Special drawing rights: purpose for creating it & its uses Traditional purpose of SDR SDRs were created to be an asset held in foreign exchange reserves under the Bretton Woods system of fixed exchange rates. After the collapse of that system in the early 1970s the SDR has taken on a far less important role Volatility in gold and USD SDR as deposit & SDR as loan: the IMF allows member countries to hold SDR deposits. This protects the countries from volatility in its foreign exchanges rates. If counties want to give loan to developing countries they can use SDR as an alternative to their local currency 14. Special drawing rights: its uses Conventional uses of SDR Peg for international currency valuation: in 1983 14 countries had pegged the values of their currency to SDR, today only Syria peg its pound to SDR. International balance of trade settlement: if many countries have to settle their trade balances across multiple currency they could use the SDR as a convenient alternative Aids to developing countries: IMF advices developing countries to purchase SDR from developing countries to encourage investment into the country Unit of account Use in international law: some international treaties allow SDR as useful settlement of dispute and penalty. 15. The SDR is based on basket of international currencies comprising the US dollar , Japanese yen , euro and pound sterling. Initially value of SDR was defined as equivalent to o.888671 grams of fine gold SDR is defined as basket consisting of : US dollars : 41.9% Euro : 37.4% Yen : 11.3% Pound Sterling : 9.4% Recalculated after every 5 years. 16. Currently, the value of 1 SDR is equal to sum of 0.423 euros, 12.1 yen, 0.111 pounds and 0.66 us dollars. IMF fixes the value of 1 SDR in terms of US dollars daily. As on January 3,2014 1 SDR = $1.535590 17. Is determined weekly. Based on weighted average of representative interest rates on 3 month debt in the money market of the 4 SDR basket currencies. 18. For the week of December 30, 2013 to January 05, 2014 Currency Currency amount under Rule O-1 (A) Exchange rate against the SDR 1 (B) Interest rate 2 (C) Product (A) x (B) x (C) Euro 0.4230 0.89399 0.1632 0.0617 Japanese Yen 12.1000 0.00616932 0.0600 0.0045 U.K. Pound Sterling 0.1110 1.07034 0.2700 0.0321 U.S. Dollar 0.6600 0.647162 0.0700 0.0299 Total 0.1282 SDR Interest Rate 3 0.13 19. The IMF allocates SDRs to member countries in proportion to their IMF quotas. Such an allocation provides a costless, unconditional international reserve asset on which interest is neither earned nor paid. General allocations of SDRs are based on a long-term global need to supplement existing reserve assets. A Special allocation of SDRs became effective August 10, 2009 and was issued on September 9, 2009, to countries that joined the IMF after 1981 and so had never been allocated any. Date Amount 19701972 XDR 9.3 billion 19791981 XDR 12.1 billion August 28, 2009 XDR 161.2 billion September 9, 2009 XDR 21.4 billion Sometime after March 3, 2011 XDR 20.8 billion 20. Since the SDR is an average of four currencies it is less valuable than the strongest and is among the first to go when reserves are sold off. Developing countries argue that it would help their liquidity if they had more SDRs, but the quota system ensures that the rich industrial countries have most of them. 21. G20, LONDON SUMMIT. 2009 G20, KOREA SUMMIT. 2010 World over finance ministers agreed at the G20s Korea meeting in 2010 to increase the quotas (contributions) of each member to the IMF, effectively doubling the IMFs SDR assets to about $US 750 billion.