Along with the World Bank, the International Monetary Fund was founded in 1944 at a conference held in Bretton Woods, New Hampshire. It is a specialized agency within the United Nations system, cooperating with the UN on matters of mutual interest. Membership in it is requisite to membership in the World Bank. A close working relationship exists between the two organizations, as well as between the fund and the General Agreement on Tariffs and Trade (GATT).
Objectives of International Monetary Fund
- Monetary Cooperation- To promote international monetary cooperation through a permanent institution that provides the machinery for consultations and collaboration on international monetary problems.
- Expansion of Trade- To facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members as primary objective on economic policy.
- Exchange Coordination- To promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation.
- System of Payments- To assist in the establishment of a multilateral system of payment in respect to current transactions between members and in the elimination of foreign exchange restrictions that hamper the growth of world trade.
- Confidence- To give confidence to members by making the general resources of the Fund temporarily available to them under adequate safeguards, thus providing them with the opportunity to correct maladjustments in their balance or payment without resorting to measures destructive of national or international prosperity.
- Equilibrium- In accordance with the above, to shorten the duration and lessen the degree of disequilibrium in the international balance of payment of members.