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The International Monetary Fund

Ved Gandhi

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Annex 1

Purposes of the Fund

(i) To promote international monetary cooperation through a permanent institution which provides machinery for consultation and collaboration on international monetary problems.

(ii) 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 production resources of all members as primary objectives of economic policy.

(iii) To promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation.

(iv) To assist in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of foreign exchange restrictions which hamper growth of world trade.

(v) To give confidence to members by making the general resources of the Fund temporarily available to them under adequate safeguards, thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity.

(vi) In accordance with the above, to shorten the duration and lessen the degree of disequilibrium in the international balances of payments of members.

The Fund shall be guided in all its policies and decisions by the purposes set forth in this Article.

(Article I of the Fund's Articles of Agreement, all emphasis is added.)

The International Monetary Fund and the World Bank at a Glance

International Monetary Fund

* oversees the international monetary system

* promotes exchange stability and orderly exchange relations among its member countries

* assists all members ¾ both industrial and developing countries ¾ that find themselves in temporary balance of payments difficulties, by providing short to mediumterm credits

* supplements the currency reserves of its members through the allocation of SDRs (special drawing rights)

* draws its financial resources principally from the quota subscriptions of its member countries

has at its disposal fully paidin quotas now totalling SDR140 billion (more than $200 billion)

World Bank seeks to promote the economic development of the world's poorer countries

* assists developing countries through longterm financing of development projects and programs

* provides to the poorest developing countries whose per capita GNP is less than $1,305 a year special financial assistance through the International Development Association (IDA)

* encourages private enterprises in developing countries through its affiliate, the International Finance Corporation (IFC)

* acquires most of its financial resources by borrowing on the international bond market

* has an authorized capital of $184 billion, of which members pay in about 10 %

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