International Monetary Fund -How does it work?\r\nMany occasions we read in Newspapers or in different journals regarding the International Monetary Fund. IMF has done this, IMF has done that and many more. But many of us don't know Who actually IMF is and what does it actually do. Therefore today I have decided to write a blog post on the International Monetary Fund or IMF. This is a prestigious institution of the global economy, which brought the whole world under one local market and an independent body like United Nations.\r\n\r\nThe International Monetary Fund or IMF is an institution meant for providing financial aid and bestow financial stability to its different member countries at international level. It primarily aims for the eradication of global poverty by ensuring sustainable economic growth. IMF also takes a significant role in promoting international trade, commerce, employment creation.\r\n\r\n\r\n\r\nTherefore, from the activities of IMF, in my opinion, it can be said that IMF had broken down the international barriers and brought the whole world under one umbrella. IMF considers all the member countries(presently 189) as a single unit and does not make any differentiation across the borders.\r\n\r\nIMF not only extends financial support to its member countries but also keeps a strong supervision on the financial system and its implementations and makes sure the ease of doing business and trades at international levels.\r\n\r\nThe IMF at its website states that it emerged in July 1944 during the world war-II at Bretton Woods in the United States of America in order to cut down the competitive currency devaluation among different countries that caused the great depression in the year 1930 across the world. Currently, IMF is consists of 189 member countries across the globe.It had opened a new era for effecting international trades, commerce and business, economic growth and financial stability among the member countries.\r\n\r\nAT present Christine Lagarde has been holding the charge of\u00a0 Managing Director of IMF since June 2011. Also,\u00a0Tao Zhang is handling the role of Deputy Managing Director at the IMF from August 2016 to tll date.\u00a0\r\n\r\nYou can find the\u00a0IMF organisational Chart\u00a0here.\r\nWhat are the objectives of the International Monetary Fund?\r\nThe main objective of the International Monetary Fund or IMF is given below for easy understanding:\r\n\r\n \tMonitoring the international economic policies and its implementation across the member countries;\r\n \tThe above monitoring or review system is based on annual consultation in order to establish stable exchange rates;\r\n \tIMF primarily observes the country's Balance of Payments and ushers in the multilateral payment system to foster financial stability and combat with the financial crisis across its member countries;\r\n \tOne of the most important objectives of IMF is the eradication of poverty by ensuring sustainable economic growth and security;IMF facilitates in the promotion of international trades, business and commerce across the globe;\r\n \tThe primary objectives of IMF is job creation in different fields of the member countries;\r\n \tIMF also extends financial aids to its member countries to foster economic growth and stability;\r\n \tIMF assists the member countries in identifying the global risks by analysing the overall global market conditions and takes the necessary course of action therefor;\r\n \tIt not only provides financial aids but also extends technical assistance to its member countries in different fields;\r\n \tMost importantly, IMF was established keeping in view the objectives of ending the policy of competitive currency devaluation mechanism across the globe.\r\n\r\nYou may also read the following:\r\n\r\n \tWhat is BSBD account? Basic Savings Bank Deposit account;\r\n \tHow to calculate mutual fund returns in excel;\r\n \tSenior Citizen Savings Scheme\r\n\r\nWhat are the key functions of the International Monetary Fund?\r\nThe functions of the International Monetary Fund are numerous. Only the key functions are discussed below for easy understanding.\r\n\r\n \tThe first and foremost function of IMF is to supervising the international monetary system;\r\n \tIMF formulates a specific code of conduct on currency exchange rate policies and provides restrictions on current account transactions;\r\n \tIt also ensures implementation of its formulated policies by checking its member countries financial health;\r\n \tIMF constantly monitors on the balance of the payment system of the member countries and if any imbalances is found, instructs the member countries to set right policy implementation mechanism;\r\n \tOne of the most important functions of IMF is to securing financial stability and facilitation of international trade across the globe;\r\n \tThe International Monetary Fund also formulates different policies in order to achieve sustainable economic growth by generating employment for its developing member countries;\r\n \tIMF functions at times as an institution for providing short term funds at very low-interest rates to eradicate deficit or bring forth the equilibrium in Balance of Payments;\r\n \tThree main functions of IMF combined together is the application of the principles of market economy, broadening up the open economy for international trades and lastly, preventing deflation;\r\n \tIt has been a continuous endeavour of IMF to comply with its poverty reduction policy as formulated for its developing member countries and as a result, sometimes it has to initiate some debt relief policies;\r\n \tIMF strongly prohibits the use of multiple exchange rates in order to remove currency devaluation and ensures implementation of policies on stable exchange rates;\r\n \tThe main function of IMF is to providing a financial support to its member countries. But it does not finance any particular projects, unlike the World Bank.\r\n \tIMF also functions as the provider of technical assistance to its member countries in the field of formulation and implementation of fiscal and monetary policy, handling various transactions with the IMF.\r\n \tIt functions as a regulatory institution in maintaining the supply and demand of currencies for its member countries.\r\n\r\nWhat does IMF do for its member countries?\r\n\r\n\r\nIn simple words, IMF ensures its policy implementation, extends financial co-operation, smoothens cross-border trades, looks for providing financial stability, all-round economic growth and most importantly takes a crucial part in eradicating poverty across the developing member countries.\r\n\r\nIt is also known to IMF that only extending financial aids to its member countries would not help in reducing poverty itself, so it also works with member countries hand to hand for employment generations. Because IMF believes in sustainable economic growth only. Unlike the World Bank, IMF does not provide loans to its member countries. It only extends financial assistance for a short period of time to meet the deficit occurred due to Balance of Payments.\r\n\r\nIMF keeps a strong surveillance on the supply and demand of currencies for maintaining an equilibrium and in order to doing that if it finds that any particular currency is in scarce or in great demand, it buys that particular currency to boost the currency supply in demand.\r\nFinal words on International Monetary Fund or IMF\r\nTo conclude this blog post I will now write a summary of the 10 key objectives and functions of the IMF.\r\n\r\n \tMonitors world economy and anticipate probable risks for member developing countries,\r\n \tFormulate and implement various policies for sustainable economic growth,\r\n \tReduction of poverty, Employment generation, Prohibits competitive currency devaluation,\r\n \tMaintains equilibrium in Balance of Payments,\r\n \tControls current account transactions to avoid the balance of payments problems and helps to combat financial crises,\r\n \tProvides short term financial aids to member countries,\r\n \tProvides technical analysis such as formulation and implementation of fiscal and monetary policy, Facilitates in promoting international trades.