The International Monetary System is the short-term wing of
the international financial system. It encompasses all relations as
between the national market sys-tems. I.M.F is the Apex body
for this system and acts as a central bank of central banks of the
nations.
The establishment of the International Monetary Fund (IMF)
in 1945 was a landmark in the international monetary field.
Before 1945 there was international monetary disorder,
exchange restrictions and a host of other undesirable trade and
exchange practices. The need for international monetary cooperation
and under-standing was felt soon after the war, and
the Bretton Woods Conference resulted in the establishment of
IMF and the World Bank. Originally 44 member countries met
at the Conference and the IMF was set up as per the agreement
reached among them in December 1945. It had an original
membership of 29 countries and by end of 2002 rose to cover
almost all the, countries, (182) barring a few smaller countries.
The IMF is governed by a policy-making body, viz. the Board
of Governors but the day-to-day affairs are looked into by the
Board of Executive Directors consisting of the representatives
of 16 elected countries and 6 nominated countries. . The Board
of Executives Directors meets as often as is necessary to decide
on all matters pertaining to the role of the Fund. The Managing
Director is the chief executive of the Fund and is appointed by
the Board of Executive Directors. It has a secretariat in Washington.
Objectives of IMF
The IMF is primarily a short-term financial institution a lender
and a borrower - and a central bank of central banks and
secondarily, aims at promoting a code of conduct among
members for orderl ...