ESI Study Notes for SEBI Exam – International Monetary Fund (IMF)

In this blog, we will be providing you with the ESI Study notes for the SEBI 2018 Exam. The Topic which will be covered here is “International Monetary Fund (IMF)”. It is a major economic institution of the world, hence an important part of the Syllabus for the SEBI 2018 Exam. We will be looking at the creating, members, executive board and functions of IMF.

SEBI ESI Study Notes – Creation of IMF

  • The International Monetary Fund (IMF) was formed in 1944 at the Bretton Woods Conference. The World Bank Group was also established along with IMF at this conference.
  • Members of 44 countries had signed the agreement to form the International Monetary Fund (IMF) with aim of stabilizing the Global Monetary System which was hampered because of the World War 2 and the Great Depression of 1929.
  • It was decided that the permanent headquarters of the IMF would be in Washington D.C. in USA.
  • The actual operations of the IMF started in the year 1947.

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SEBI ESI Study Notes – Members of IMF

  • As of in 2018, IMF has 189 member countries.
  • Usually, the Finance minister or the central bank director of the member country represents the country at the annual meeting of IMF.
  • Each member Nation has a Quota of vote share in the decision making. The quota of the member State is based on their contribution to the IMF Fund.
  • The United States of America has the maximum contribution which gives them a vote share of 17%.
  • 50% of the vote is with 8 member nations – Canada, France, Germany, Italy, Japan, Russia, UK and USA.

SEBI ESI Study Notes – Executive Board of IMF

  • The IMF Executive council has 24 executive directors which cover the day to day functioning of the IMF.
  • Out of the 24, 8 Executive directors are from the following 8 individual member countries – China, France, Germany, Japan, Russia, Saudi Arabia, UK and the USA.
  • The remaining 16 executive directors represent the other remaining members of the IMF grouped by World regions.

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SEBI ESI Study Notes – Functions and Role of IMF

  • The primary function of IMF is to stabilize the Monetary policy of the world economy.
  • It also monitors the Global currencies, their values, exchanges, etc.
  • It is monitors of the local economies of its member nations and gives periodic advice for smooth running of these economies.
  • IMF functions as a lender of loans to countries who are facing a Balance of Payment issue or any other economic need.
  • Al the IMF functions are carried out with the aim of promoting sustainable economic growth, reduction in poverty, reduction in employment all over the world.
  • It issues SDRs – Special Drawing Rights which is an international reserve asset which the member countries can use to exchange currency.
  • It provided technical assistance o member Nations for building and strengthening their economic institutions.

You may also like to read – 

SEBI 2018 Exam Notes – Securities Markets Basic Terms (Part 1)

SEBI 2018 Exam Notes – Securities Markets Basic Terms (Part 2)

SEBI 2018 Exam Notes – Bonds and their Types

SEBI 2018 Exam Notes – Formation, Functions and Responsibilities of SEBI

That is all from us in this ESI Study notes blog for the 2018 SEBI Grade A Exam. We hope you find the information provided about the International Monetary Fund useful for your overall SEBI 2018 Exam Preparation. All the best for the SEBI Exam.

ESI Study Notes

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