IMF international currency. International Monetary Fund: history of creation and activities. IMF Official Targets

Evgeny Borodin, consultant

General information

The International Monetary Fund (IMF) is a specialized agency of the United Nations established at the World Monetary and Financial Conference in Bretton Woods (USA, New Hampshire) in July 1944, at which its participants adopted the articles of the IMF agreement, which play the role of its charter. The Fund began its practical activities in May 1946 - it includes 39 countries. The USSR took part in the Bretton Woods conference, but due to the beginning of the Cold War, the articles of the IMF agreement were not ratified. For the same reason, Poland, Czechoslovakia, and Cuba left the IMF in the 1950s and 1960s.

During the "perestroika", the "Big Seven" made a decision: the European Union coordinates the provision of assistance to the countries of Eastern Europe, and the IMF directly - the USSR (then - Russia and the CIS countries). On June 1, 1992, Russia signed the articles of the IMF agreement and officially became a member of this organization.

The IMF currently has 185 member countries., almost all UN member countries except Cuba, North Korea, Andorra, Liechtenstein, Monaco, Nauru and Tuvalu.

The purpose of the IMF is to regulate the monetary and credit relations of the member states and assist them in the event of a balance of payments deficit by providing short- and medium-term loans in foreign currency.

The supreme governing body of the IMF is the Board of Governors, in which each member country is represented by a governor and his deputy. All governors meet once a year for the Annual Meetings of the IMF and the World Bank.

IMF policy is overseen by the International Monetary and Financial Committee (IMFC) 24 whose members are finance ministers or central bank governors of countries and groups of countries represented on the Executive Council.

The IMF's Executive Board is responsible for most decisions and consists of 24 Executive Directors. Russia is represented by Mozhin A.V. and Lushin A.. Eight countries with the largest quotas in the Fund appoint their directors - the USA, Japan, Germany, France, Great Britain, China, Russia and Saudi Arabia. The remaining 176 Member States are organized into 16 groups, each of which elects one Executive Director.

The Executive Board elects a Managing Director for a five-year term (since September 2007 - Dominique Strauss-Kahn, France).

By agreement between the founding countries of the Fund, the managing director must be a representative of one of the European countries, and the director of the World Bank must be a US citizen.

The IMF has approximately 2,700 staff and is headquartered in Washington DC. The Foundation has offices in more than 80 countries around the world, including in Russia.

The IMF earns income from interest and fees on loans and uses income to cover financing costs, pay administrative expenses, and accumulate insurance balances. In fiscal year 2007, revenue was SDR111 million below expenses. The net income shortfall mainly reflects a significant reduction in outstanding IMF loans, from a peak of SDR 70 billion in September 2003 to SDR 7.3 billion at the end of fiscal year 2007, and due to weak demand for new IMF loans, as well as early repayment of loans by some member states in recent years.

Record-breaking borrowings from the IMF - $ 120 billion, fell on 1997-1999. The largest recipients of financial assistance during this period were the countries most affected by financial crises: South Korea, Indonesia, Brazil, and Russia.

Conditions for membership in the IMF and lending facilities

When joining the IMF, each member country pays a subscription fee called a "quota". Countries pay 25% towards their quota in the form of reserve assets, the so-called. HAPPY BIRTHDAY, or the main currency (US dollar, euro, Japanese yen, pound sterling). If necessary, for lending purposes, the IMF may request from a member country the remainder to be paid in its own currency. The quotas are reviewed every 5 years. The total amount of contributions from member countries forms the authorized capital of the IMF, which is used to provide temporary assistance to countries experiencing financial difficulties.

The quota is calculated on the basis of data on the volume of the country's GDP, as well as on the basis of the available gold and foreign exchange reserves of states and determines the amount that it can borrow from the IMF and its voting right. The total amount of quotas in the IMF is equivalent to 217.4 billion SDRs. The United States has the largest quota of 37.149 billion SDRs or 371,743 (16.77%) votes, while Russia has 5.945 billion SDRs or 59,704 (2.69%) votes. However, the new Managing Director Strauss-Kahn, who was not supported by Russia during his appointment, proposes to reduce Russia's quota to 1.7-1.8% and transfer its influence to the level of the Persian Gulf countries, Thailand and Argentina. Together, the United States and the EU countries currently have 50% of the entire IMF voting quota and, in fact, can pass any decision regardless of the opinions of other countries combined, so reducing Russia's quota, by and large, has no practical significance.

Basic mechanisms and conditions for lending

When providing financial assistance, the Fund requires the borrowing country to fulfill certain conditions regarding its currency system, foreign trade, state budget balance, and the degree of their rigidity increases as you move from one tranche to another. The obligations of the borrowing country are recorded in a Letter of intent or Memorandum of Economic and Financial Policies sent to the IMF. Progress in meeting commitments is monitored through periodic evaluation. If the IMF considers that a country is using a loan in contradiction with the goals of the Fund, does not fulfill its obligations, it can limit its lending, refuse to provide the next tranche. Thus, this mechanism allows the IMF to exert economic and often political pressure on the borrowing countries.

Relations between Russia and the IMF

In January 1992, the Russian government officially applied to the IMF for financial assistance in the amount of $6 billion to create a stabilization fund. The first agreement on assistance was signed by M. Camdessus and E. Gaidar in early July 1992. On August 5, the first tranche of $1 billion was provided, which was used to replenish foreign exchange reserves, make payments on external debt and intervene in the foreign exchange market. However, Russia did not receive subsequent tranches of the reserve loan in 1992. The funds ($6 billion) intended for the ruble stabilization fund were not allocated either. The IMF explained the refusal by the fact that the Russian government evaded the implementation of the stabilization program agreed with it, the volume of GDP decreased by 14.5%, the federal budget deficit, instead of the planned level of 5% of GDP, reached (according to the IMF methodology) 22.4%, and inflation averaged 20.5% per month.

In June 1993, the IMF offered Russia a second $3 billion loan. within the framework of the newly created direction - "Assistance to system transformations" (System Transformation Facility - STF). Unlike other STF loans, the terms were less stringent and required the borrowing country not to impose trade restrictions. However, on September 19, 1993, the IMF suspended the transfer of money to the Russian Federation due to the fact that the Government was unable to contain inflation and cut budget spending. In 1994, negotiations were held with an IMF delegation, as a result, Russia received a second tranche of a $1.5 billion loan to support systemic reforms. After the currency shocks of the fall of 1994, culminating in Black Tuesday (October 11, 1994), The government has taken a course on suppressing inflation as the main macroeconomicgoals, which prompted support from the IMF. This resulted in the provision in April 1995 of a standby stabilization loan of $6.8 billion. The package of agreements with the IMF consisted not only of the requirement to reduce inflation to 2% per month, but also the state budget deficit to 8% of GDP. Monitoring was to be carried out every month (before that it was carried out quarterly) by a special working group consisting of representatives of the Ministry of Finance, the Central Bank and IMF experts.

From the point of view of Russia's external economic indicators, 1997 was the most successful year. In 1998, the economic situation in Russia deteriorated sharply in connection with the fall in world energy prices. As a result, in the first half of 1998 the balance of payments on the current account turned from active to passive with a deficit of $5.1 billion. financial assistance. The agreement with the IMF provided for a loan in four tranches, but the first loan provided could no longer save the situation, and on August 17, 1998, a default was declared in the country.

After the default, Russia did not receive financial assistance from the IMF. In 2005, the Government repaid its debt to the IMF ahead of schedule, paying $3.3 billion.

Russian IMF loans and their conditions

In recent years, IMF policy and recommendations in relation to developing countries have often been criticized, the essence of which is that the implementation of recommendations and conditions is ultimately not aimed at increasing the independence and development of the national economy, but only tying it to international financial flows.

Milton Friedman, an American economist and Nobel Prize winner in economics, believes that the IMF's policy has become a destabilizing factor in the markets of developing countries. And not because of the conditions that he imposed on his clients, but primarily because he is trying to protect private investors from their own mistakes. Mexico's bailout during the 1995 crisis spurred a crisis in other emerging markets. "It would not be an exaggeration to say, - emphasizes M. Friedman, - if the IMF did not exist, then there would be no East Asian crisis." This shows that international structures such as the IMF are not able to effectively solve the tasks assigned to them. Some economists even began to call for the termination of the IMF in the form in which it exists now.

Today, practically no one takes IMF-related financial loans, and therefore new IMF liabilities have sharply decreased: from SDR 8.3 billion in fiscal year 2006 to SDR 237 million in 2007, and those who previously received financial assistance from the IMF are trying to repay ahead of schedule debts. In fiscal year 2007, nine member countries: Bulgaria, Haiti, Indonesia, Malawi, Serbia, Uruguay, Philippines, Central African Republic, Ecuador settled their current IMF obligations ahead of schedule totaling SDR 7.1 billion.

Strauss-Kahn continues to fight for political survival, with supporters claiming the harassment allegations are a conspiracy. At the same time, within the International Monetary Fund (IMF) itself, the struggle for the post of head has already begun. Emerging economies demand that this prestigious seat be given to them, but the Europeans do not give up their claims either.

The International Monetary Fund is a $325 billion organization headquartered in Washington DC. Until very recently, the IMF had only one main issue - saving the euro. The share of this fund in aid packages for Greece, Ireland and Portugal is 78.5 billion euros. Quietly and effectively, the fund acted as an intermediary between Europe's debtors and donors.

After the arrest of the head of the IMF, Dominique Strauss-Kahn, which was carried out on Saturday evening, New York time, the fund itself became a toy for representatives of various interests. The once-powerful head of the IMF continues to fight for his political survival. His supporters are spreading rumors and evidence that the attempted rape charge is a secret service-style conspiracy. DSK - as it is sometimes abbreviated - did not allegedly attempt to rape the maid at New York's Sofitel hotel, as that was when he allegedly dined with his daughter.

Installed that nothing is installed. It is believed throughout the world that one should not rush to condemn him. Federal Chancellor Angela Merkel also said yesterday that the results of the investigation should be awaited.

She said so, but she did it differently. A few minutes later, Merkel, speaking on behalf of Europe, announced her claims to the position of head of the IMF: although in principle this is correct, and in the “medium term”, according to Merkel, countries with developing economies can claim leading positions in international organizations. “However, I believe that in today's conditions, when we have a lot of discussions about the European space, there are good reasons for Europe to have good candidates at its disposal,” she stressed.

Since ignoring one's own interests costs nothing, Merkel gave hope to emerging economies: "The conditions in the IMF should reflect the balance of power in the world," Merkel said at the G20 summit in Seoul. Shortly before this, the 20 major economies of the world decided to increase the share of the vote of countries with developing economies. The words of the head of the Eurogroup Jean-Claude Juncker (Jean-Cluade Juncker) sounded even more definite. Strauss-Kahn is "the last European" to head the IMF "for the foreseeable future," he said back in 2007.

Countries with developing economies have responded joyfully to this opinion of the West. It is high time to move away from a model dominated only by industrialized states, said Brazilian Finance Minister Guido Mantega.

Now comes the sobering up. And after sobering up, the struggle for power begins. Berlin announced yesterday that it was conducting soundings "with our European friends" on the issue of a candidate for the head of the IMF.

The struggle of emerging economies for more influence in the IMF began even before Strauss-Kahn's arrest. In April of this year, Brazil's finance minister complained that the Americans regularly run the World Bank and the Europeans run the IMF. Such a system, in his opinion, is already outdated. These posts should be distributed according to ability, and the process itself should be transparent, demanded the Brazilian.

In other words, those countries that are driving global growth - that is, China, India, and Brazil - should have a chance to take leadership positions in the future. The share of the leading countries with developing economies in the global gross domestic product in the last 20 years alone (by 2010) increased from 10.4% to 24.2%, while the share of the seven largest industrial countries, on the contrary, decreased from 64.9% to 50 .7%.

Therefore, back in the fall, countries with developing economies received additional votes in the IMF. The finance ministers of the 20 largest industrialized and emerging economies (G20) have decided to distribute almost 6% of the voting rights previously held by industrial powers among countries such as China, India, Brazil and Russia. As a result of the reform, these four countries received more rights and more responsibility in the executive directorate of the International Monetary Fund. In March, this reform came into force.

Now they demand changes on a personal level as well. That is why, immediately after the events with Dominique Strauss-Kahn in New York, the name of Turkish politician Kemal Dervis began to be mentioned more and more often. The architect of Turkey's ten-year-old economic reforms and longtime senior World Bank official comes from an emerging economy and is considered a brilliant economist. Since he is from Turkey, he could apparently be in the business of building bridges between Asia, Europe and the United States.

His work at the Washington-based World Bank has provided him with excellent connections. And in Europe, he no longer has the image of a person who primarily protects the interests of Turkey. Kemal Dervis is now seen more as an international economist who happens to hold a Turkish passport.

Dervis' name was already mentioned at the annual meeting of the Asian Development Bank, which took place almost a week ago in the Vietnamese city of Hanoi. Maybe it's time for an Asian to head the IMF. Nobel laureate Joseph Stiglitz also thinks he's an excellent candidate, as he said in a private discussion on Monday.

The Chinese leadership is rather reserved in connection with the threatening departure of Strauss-Kahn, but in fact, this scandal suits Beijing quite well - the European leaves his post in disgrace, and this creates the conditions for reviewing the existing structures. The informal agreement of the industrialized states that the European should always be at the head of the International Monetary Fund is irritating this rising economic power. From the Chinese point of view, this kind of arrangement is outdated and reminiscent of the times of colonialism.

Americans and Europeans can share leadership positions between themselves, since together they have enough votes to block other proposals. Even after the reform, China, as the second largest economy in the world, has 3.82% of the vote and is far behind the US, which has almost 17%. These figures also reflect the share of participation in invested capital. China, of course, would be willing to pay more for more influence, but under existing rules, it cannot do so.

That is why the Chinese at meetings like the G20 constantly advocate the introduction of a system that would more accurately reflect the world's economic realities. They see themselves as champions of the rights of other emerging economies, and besides, the Chinese secretly hope to secure a leading international role in this way.

Other emerging economies, including India and Russia, are far less ambitious about IMF reform. "They want to solve the problems they currently have, but they don't intend to rewrite the global rules of the game," said Paris-Dauphine University economist Jean Pisani-Ferry. China also assumes that it is not yet in a position to press its own demands - after all, its own national currency is not yet freely convertible.

This is also why French government circles are discussing the idea of ​​keeping the existing structures and instead of Strauss-Kahn sending an internationally reputed Treasury Secretary Christine Lagarde to Washington. On paper, she
looks like a very suitable candidate: while working as a lawyer, she met all the major figures in the financial world, and during the financial crisis she earned herself a reputation as a charming but exceptionally tough negotiating partner. In addition, the post of head of the IMF could open up additional prospects for her, especially given the possible defeat of her boss, Nicolas Sarkozy, in the 2012 presidential election. So far, judging by the official statements made, she plans to compete for the mandate of a simple member of parliament.

Her problem: "The DSK case has undermined the credibility of France and their candidates for high international positions," they say in Paris. DSC is the internationally accepted abbreviation for Dominique Strauss-Kahn. In addition, Lagarde herself became a participant in a high-profile case, which, however, cannot be compared with the problems of Strauss-Kahn. She is accused of using her influence to win a favorable ruling for the well-known French entrepreneur in a dispute between the state and Bernard Tapie over the sale of a stake in Adidas. This case has not received much international publicity, but it may become an obstacle in the event that Lagarde will apply for the post of head of the IMF.

When it comes to such responsible positions as the head of the IMF, the candidate will be screened - and now for real - twice as carefully.

In this article, we will talk about the functions of the International Monetary Fund (IMF), the principles of work, financing and its interaction with Russia.

What are international funds for?

Their main role is financial and advisory assistance to the participating countries in economic development.

The International Bank for Reconstruction and Development has a leading role in the stabilization function. The IBRD or the World Bank includes the Development Association and the Financial Corporation. There are also various international banks serving their regions - Asian, African and European states.

IMF - history of creation

The IMF is a monetary and credit organization that operates as a specialized structure of the UN.

The IMF was created in 1944 at the Bretton Woods conference. In December 1945, 29 states signed the Fund's Charter.

The main tasks of the Foundation are:

• promotion of world trade;
• stabilization of exchange rate fluctuations;
• assistance to IMF member countries in correcting the deficit of their balance of payments and others.

To date, the IMF includes 188 countries.

How the authorized capital of the IMF is formed

The initial authorized capital amounted to 7.6 billion dollars. USA. Now the IMF uses its own reserve and payment means, the so-called SDRs - special drawing rights. They are not printed, but presented as entries on balance sheets.

With the help of SDRs, the balance of payments is regulated, reserves are replenished, and payments are made for the Fund. Today, the cost of 1 SDR is 1.4 US dollars, and the approximate value of the authorized capital of the IMF is estimated at 238 billion SDRs or 327 billion US dollars.

The fund is replenished by contributions from states according to established quotas. They determine the amount of borrowing, as well as the voting power of the participating country.

The payment structure is something like this:

1. 25% of the amount goes to the IMF accounts - in the form of SDRs or other foreign currency;
2. 75% of liabilities are repaid in national currency.

The Russian share of quotas is approximately 2.5%. The percentage of votes of our state, in the total number of voters in the IMF, is 2.4%.

IMF tranche

Short-term or long-term lending to IMF member countries is carried out in portions - in tranches.

The amount of financing can correspond to the usual loan shares (maximum 125% of the quota) or can be significantly increased. The state can receive an increased amount of funds in case of serious difficulties with the balance of payments.

Tranches are paid every six months, three months, a month or more often. IMF resources should be directed towards reforms and stabilization of macroeconomic or structural indicators.

IMF loan conditions

Lending is carried out in conjunction with the nomination of a number of requirements. Failure to comply with the terms of the Fund may result in a refusal to provide further tranches or to limit lending.

With each new tranche, the requirements of the IMF are becoming tougher. These conditions may be:

• privatization of state property;
• ensuring the free movement of capital;
• optimization or elimination of budget expenditures for the social sphere (health, education, housing, public transport);
• wage cuts;
• tax increase and more.

Through the tranche system, the IMF can exert economic influence on the borrowing country.

How are IMF debts paid off?

Debtor countries repay each credit tranche within 4-10 years. Thanks to the IMF reforms of 2010-2011. access limits have been doubled. The amount of lending to the world's poorest countries was also increased without the need to pay %% until 2016 inclusive.

The Russian Federation became a member of the IMF in May 1992. According to the Ministry of Foreign Affairs, at the beginning of 2005 Russia repaid ahead of schedule all credit obligations to the Fund in the amount of approximately $3.3 billion. USA.

Today, the Russian Federation seeks to independently develop and implement economic programs, without attracting IMF resources.

Advice from Sravni.ru: you can follow the official news of the organization on the official website.

The International Monetary Fund (IMF) was established in 1944 at a conference in Bretton Woods in the United States. Its goals were originally declared as follows: promoting international cooperation in the field of finance, expanding and growing trade, ensuring the stability of currencies, assisting in settlements between member countries and providing them with funds in order to correct imbalances in the balance of payments. However, in practice, the Fund's activities are reduced to acquisitiveness for a minority (countries and which, among other organizations, controls the IMF. Have the IMF loans, or the IMF (International Monetary Fund decoding) helped the needy states? How does the work of the Fund affect the global economy?

IMF: deciphering the concept, functions and tasks

IMF stands for International Monetary Fund, IMF (abbreviation decoding) in the Russian version looks like this: International Monetary Fund. This is designed to promote monetary cooperation on the basis of advising its members and allocating loans to them.

The objective of the Fund is to secure a solid parity of currencies. To this end, the Member States have established them in gold and US dollars, agreeing not to change them by more than ten percent without the consent of the Fund and not to deviate from this balance when carrying out transactions by more than one percent.

History of foundation and development of the Fund

In 1944, at the Bretton Woods conference in the United States, representatives of forty-four countries decided to create a common basis for economic cooperation in order to avoid devaluation, the consequence of which was the Great Depression in the thirties, and also in order to restore the financial system between states after the war. The following year, based on the results of the conference, the IMF was created.

The USSR also took an active part in the conference and signed the Act on the establishment of the organization, but subsequently did not ratify it and did not participate in the activities. But in the 1990s, after the collapse of the Soviet Union, Russia and other former Soviet republics joined the IMF.

In 1999, the IMF already included 182 countries.

Governing bodies, structure and participating countries

The headquarters of the UN specialized organization - the IMF - is located in Washington. The governing body of the International Monetary Fund is the Board of Governors. It includes the actual manager and deputy from each member country of the Fund.

The Executive Board consists of 24 directors representing groups of countries or individual participating countries. At the same time, the managing director is always a European, and his first deputy is an American.

The authorized capital is formed at the expense of contributions from states. Currently, the IMF includes 188 countries. Based on the size of the paid quotas, their votes are distributed among the countries.

IMF data show that the largest number of votes belongs to the United States (17.8%), Japan (6.13%), Germany (5.99%), Great Britain and France (4.95% each), Saudi Arabia (3 .22%), Italy (4.18%) and Russia (2.74%). Thus, the US, as having the most votes, is the only country that has the most important issues discussed in the IMF. And many European countries (and not only them) simply vote in the same way as the United States of America.

The role of the Fund in the global economy

The IMF constantly monitors the financial and monetary policies of member countries and the state of the economy around the world. To this end, consultations are held every year with government organizations regarding exchange rates. On the other hand, member states should consult with the Fund on macroeconomic matters.

The IMF provides loans to countries in need, offering countries that they can use for a variety of purposes.

In the first twenty years of its existence, the Fund gave loans mainly to developed countries, but then this activity was reoriented to developing countries. It is interesting that from about the same time, the neo-colonial system in the world began its formation.

Conditions for countries to receive a loan from the IMF

In order for the member states of the organization to receive a loan from the IMF, they must fulfill a number of political and economic conditions.

This trend was formed in the eighties of the twentieth century, and over time only continues to tighten.

The IMF Bank requires the implementation of programs that, in fact, lead not to the country's exit from the crisis, but to the curtailment of investments, the cessation of economic growth and the deterioration of citizens in general.

It is noteworthy that in 2007 there was a severe crisis of the IMF organization. The deciphering of the 2008 global economic downturn is said to have been its consequence. No one wanted to take loans from the organization, and those countries that had received them earlier sought to repay their debts ahead of schedule.

But there was a global crisis, everything fell into place, and even more. The IMF has tripled its resources as a result and has an even greater impact on the global economy.

The International Monetary Fund (IMF), (International Monetary Fund, IMF) is an intergovernmental organization designed to regulate monetary and credit relations between states and provide financial assistance to member countries to eliminate currency difficulties caused by imbalances in the balance of payments. The IMF was established at the International Monetary and Financial Conference (July 1-22, 1944) in Bretton Woods (USA, New Hampshire). The Foundation began its practical activities on March 1, 1947.

The USSR also took part in the work of the Bretton Woods Conference. However, later, in connection with the "cold war" between East and West, he did not ratify the Agreement on the formation of the IMF. For the same reason, during the 50-60s. Poland, Czechoslovakia and Cuba left the IMF. As a result of deep socio-economic and political reforms in the early 90s. former socialist countries, as well as states that were previously part of the USSR, joined the IMF (with the exception of the Democratic People's Republic of Korea and Cuba).

There are currently 182 member states of the IMF (see Chart 4). Any country pursuing an independent foreign policy and ready to accept the rights and obligations stipulated by the IMF Charter can become a member of the organization.

The official objectives of the IMF are:

• promote the balanced growth of international trade;
• maintain the stability of exchange rates;
• contribute to the creation of a multilateral system of settlements for current transactions between members of the Fund and the elimination of foreign exchange restrictions that hinder the growth of international trade;
• provide member countries with credit resources that allow them to regulate the imbalance of temporary payments without using restrictive measures in the field of foreign trade and settlements;
• serve as a forum for consultation and cooperation in the field of international monetary issues.

Responsible for the smooth operation of the global monetary and payment system, the Fund pays special attention to the state of liquidity on a global scale, i.e. the level and composition of reserves held by Member States to cover trade and payment needs. One of the important functions of the Fund is also to provide additional liquidity to its members through the allocation of special drawing rights (SDRs). SDR (or SDR) is an international currency unit used as a conditional scale for measuring international claims and obligations, establishing currency parity and exchange rate, as an international means of payment and reserve. The value of the SDR is determined on the basis of the average value of the five major currencies of the world (before January 1, 1981 - sixteen currencies). The determination of the share of each currency is made taking into account the country's share in international trade, but for the US dollar, its share in international settlements is taken into account. So far, 21.4 billion SDRs have been issued with a total value of about $29 billion, which is about 2% of all reserves.

The Fund has significant general resources to finance temporary imbalances in the balance of payments of its members. To use them, a member must provide the Fund with a strong justification for the need that has arisen, which may be related to the balance of payments, reserve position or changes in reserves. The IMF provides its resources on the basis of equality and non-discrimination, taking into account the social and domestic political goals of member countries. The Fund's policy enables them to use IMF financing at an early stage of balance of payments problems.

At the same time, the Fund's assistance contributes to overcoming imbalances in payments without the application of trade and payment restrictions. The Fund plays a catalytic role as changes in government policies in the implementation of IMF-supported programs help attract additional financial assistance from other sources. Finally, the Fund acts as a financial intermediary, ensuring the redistribution of funds from those countries where there is a surplus of them to countries where there is a deficit.

IMF Governance Structure

1. The highest governing body is the Board of Governors, in which each member country is represented by a Governor and his deputy. In most cases, the Fund's managers are finance ministers or central bankers or other persons of the same official position. The Board of Governors elects a chairman from among its members. The competence of the council includes the resolution of the most important, fundamental issues of the IMF's activities, such as the admission and expulsion of members of the Fund, the determination and revision of quotas, the distribution of net income, and the selection of executive directors. The Governors meet once a year to discuss the activities of the Fund, but they may vote at any time by mail.

The IMF is organized as a joint-stock company, and therefore the ability of each participant to influence its activities is determined by the share in the capital. In accordance with this, the IMF operates the principle of the so-called "weighted" number of votes: each member state has 250 "basic" votes (regardless of the contribution to the Fund's capital) and an additional one vote for every 100,000 SDR units of its share in this capital. In addition, when voting on certain issues, the creditor countries receive an additional one vote for every $400,000 of loans provided by them on the voting day, due to a corresponding reduction in the number of votes of the debtor countries. This arrangement leaves the decisive word in the management of the affairs of the IMF to the countries that have invested the largest funds in it.

Decisions in the Board of Governors of the IMF are generally taken by a simple majority (at least half) of the votes, and on the most important issues (for example, amending the Charter, establishing and revising the size of the shares of member countries in the capital, a number of issues of the functioning of the SDR mechanism, policies in the field of exchange rates, etc.) by "special (qualified) majority", currently providing for two categories: 70% and 85% of the total votes of member countries.

The current IMF Charter provides that the Board of Governors may decide to establish a new permanent governing body - the Council at the level of ministers of member countries to oversee the regulation and adaptation of the world monetary system. But it has not yet been established, and its role is played by the 22-member Interim Committee of the Board of Governors on the World Monetary System, established in 1974. However, unlike the proposed Council, the Interim Committee does not have the power to make policy decisions.

2. The Board of Governors delegates many of its powers to the Executive Board, i.e. The Directorate, which is responsible for the conduct of the Foundation's business and operates from its Washington headquarters.

3. The IMF Executive Board appoints a Managing Director who heads the Fund's administrative apparatus and is in charge of day-to-day affairs. Traditionally, the managing director must be European or (at least) non-American. Since 2000, the Managing Director of the IMF is Horst Keller (Germany).

4. The IMF Committee on Balance of Payments Statistics, which includes representatives from industrialized and developing countries. It develops recommendations for a wider use of statistical data in the compilation of balance of payments, coordinates the conduct of a basic statistical survey of portfolio investment, and carries out studies on the registration of flows associated with derivative funds.

Capital. The capital of the IMF is made up of subscription contributions from member countries. Each country has a quota expressed in SDRs. A member's quota is the most important element of its financial and organizational relationship with the Fund. First, the quota determines the number of votes in the Fund. Secondly, the size of the quota is based on the extent of access of the IMF member to the financial resources of the organization in accordance with the established limits. Third, the quota determines the share of the IMF member in the allocation of SDRs. The Charter does not provide methods for determining IMF membership quotas. At the same time, from the very beginning, quotas were linked, although not on a rigid basis, with such economic factors as national income and the volume of foreign trade and payments. The Ninth General Review of Quotas used a set of five formulas agreed upon during the Eighth General Review to produce "estimated quotas" that serve as a general measure of the relative position of IMF members in the global economy. These formulas use economic data on a government's gross domestic product (GDP), current operations, fluctuations in current receipts, and government reserves.

The US, being the country with the highest economic performance, made the largest contribution to the IMF, accounting for about 18% of the total amount of quotas (about 35 billion US dollars); Palau, which joined the IMF in December 1997, has the smallest quota and contributed about $3.8 million.

Prior to 1978, 25% of the quota was paid in gold, currently in reserve assets (SDRs or freely usable currencies); 75% of the subscription amount - in national currency, usually provided to the Fund in the form of promissory notes.

The IMF Charter provides that in addition to its own capital, which is the main source of financing its activities, the Fund has the ability to use borrowed funds in any currency and from any source, i.e. borrow them both from official bodies and in the private market for loan capital. To date, the IMF has received loans from the treasuries and central banks of member countries, as well as from Switzerland, which was not a member until May 1992, and from the Bank for International Settlements (BIS). As for the private money market, he has not yet resorted to its services.

Lending activities of the IMF. Financial operations of the IMF are carried out only with the official bodies of member countries - treasuries, central banks, foreign exchange stabilization funds. The Fund's resources can be made available to its members through a variety of approaches and mechanisms, differing mainly in terms of the types of problems of financing the balance of payments deficit, as well as the level of conditionality put forward by the IMF. Moreover, these conditions are a composite criterion that includes three separate elements: the state of the balance of payments, the balance of international reserves and the dynamics of the reserve position of countries. These three elements, which determine the need for balance of payments financing, are considered independent, and each of them can serve as the basis for submitting a request for funding to the Fund.

A country in need of a foreign currency purchases a freely usable currency or SDR in exchange for an equivalent amount of its national currency, which is credited to the IMF account at the country's central bank.

The IMF charges borrowing countries a one-time fee of 0.5% of the transaction amount and a certain fee, or interest rate, for the loans it provides, which is based on market rates.

After the expiration of the specified period, the member country is obliged to perform the reverse operation - to redeem its national currency from the Fund, returning to it the borrowed funds. Typically, this operation, which in practice means the repayment of a previously received loan, must be carried out within a period of 3 1/4 to 5 years from the date of purchase of the currency. In addition, the borrowing country must redeem its excess currency for the Fund ahead of schedule as its balance of payments improves and foreign exchange reserves increase. Loans are also considered repaid if the national currency of the debtor country, which is in the IMF, is bought by another member state.

Member countries' access to IMF credit resources is limited by some nuances. According to the original Charter, they were as follows: firstly, the amount of currency received by a member country in the twelve months preceding its new application to the Fund, including the amount requested, should not exceed 25% of the country's quota; secondly, the total amount of the country's currency in the assets of the IMF could not exceed 200% of the value of its quota (including 75% of the quota contributed to the Fund by subscription). In the 1978 revised Charter, the first limitation was removed. This allowed member countries to use their IMF foreign exchange opportunities in a shorter period than the five years previously required. As for the second condition, in exceptional circumstances its operation may also be suspended.

Technical assistance. The International Monetary Fund also provides technical assistance to member countries. It is carried out by sending missions to the central banks, ministries of finance and statistical bodies of countries that have requested such assistance, sending experts to these bodies for 2-3 years, conducting an examination of draft legislative documents. Technical assistance is expressed in the IMF's assistance to member countries in the field of monetary, foreign exchange policy and banking supervision, statistics, development of financial and economic legislation and training.