The International Monetary Fund (IMF) is the world's central organization for international monetary cooperation. It is an organization in which almost all countries in the world work together to promote the common good (IMF 2006). That’s IMF is an international organization that oversees the global financial system by observing exchange rates and balance of payments, as well as offering financial and technical assistance. The primary purpose of IMF is to ensure the stability of the international monetary system in order to sustainable economic growth and rising living standards of the member countries. And IMF also granting short-term loans and promotes free-trade to conserve foreign exchange reserves.
Major industrial nations fall suddenly in the Great Depression of 1930s. All countries gain from trade without restrictions. According to this theory of free trade, the market of all industries was enhanced. The distributional concerns are taken in to account. Some of the industries lose out even as others benefit in any given country. (IMF2006)
“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.” (IMF 2006) In this meeting, a charter of an international institution was drafted to oversee the international monetary system and to promote both the elimination of exchange restrictions relating to trade in goods and services, and the stability of exchange rates.
The IMP played a critical role to stabilize the exchange rate, prevent crisis, and resolution of crisis.
The countries who joined to the IMP agreed to keep their exchange rates pegged at rates that could be adju ...