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International Monetary Fund (IMF) serves as an important function that makes international trade less challenging. The IMF is a powerful international institution that works together with the World Bank to provide support and guidance to nations in all stages of economic progress.
The IMF is responsible for managing the global financial system and supplying loans to its member states to help alleviate financial problems. Agreement for its creation came at the United Nations Monetary and Financial Conference in 1944 and the organization came into existence in 1946. A nation must have the ability to value other nation's currency. In the past, many different ways have been used to do this, and most have failed. To date, there is no perfect way to precisely measure the true value of another country's currency.
The IMF, along with the Bank for International Settlements and the World Bank, defines the monetary policy shared almost all by countries that pursue capitalism as an economic strategy. In order to gain access to IMF loans, Bank for International Settlements agreements, and strategic World Bank development loans, a country must agree to terms determined by all three organizations.
International trade is a key element that enables nations, of all sizes, to strengthen their economic positions. Larger nations use international market to export their goods and services, while smaller nations use this international scale market to import products so they are able to produce more efficiently.
The IMF is an effort to view each country's economic position, offer suggestions, and provide the fundamental economic security that is essential to a successful international economy. The INF, on a global level, recaps many of the domestic economic goals.
Basically, the monitors exchange rate policies of member countries, lends them foreign exchange resources to support their adjustment policies when they experience balance of payments difficulties, and provides them financial assistance through a special "compensatory financing facility" when they experience temporary shortfalls in commodity export earnings.
The IMF, using a fund pledged by the member nations, buys foreign currencies on application from its members for the purpose of discharging international indebtedness and stabilizing exchange rates. The IMF currency reserve units are called Special Drawing Rights (SDRs).
Between 1974 and 1980,…
Bibliography
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Littrell, Mary. Social Responsibility in the Global Market - Fair Trade of Cultural Products. SAGE Publications, 1999.
Madeley, John. Trade and the Poor: The Impact of International Trade on Developing Countries. Intermediate Technology Publications, 1992.Raisian, John. The International Monetary Fund -- Financial Medic to the World? A Primer on Mission, Operations, and Public Policy Issues. Hoover Institution, 1998.
International Monetary Fund Web Site.
These critics argue that the United States and Europe have been the principal financial support for the IMF for over fifty years and that, but for, such support the IMF would long ago ceased to function as a viable organization. Those supporting this view, however, also argue that the IMF has lost sight of its original goal and ventured into new areas that might be best left for others
WB, IMF & WTO Neocolonialism according to the Free Dictionary (2011) is the application of a policy where a major power utilizes the political and economic power to continue its influence on the less developed nations. It also entails the control of politics of a country that in theory is sovereign and independent through the domination of its economy. It can as well be referred to as the exploitation of weaker
International Monetary Fund Globalization refers to the increasing global relationships of culture, people and economic activities and even the technological relations which aids the globalization as well. Aspects of globalization Trade; Globalization of trade entails that human beings have greater access to a variety of goods and services across the international borders .for example, cars from Germany, software from India, clothing from China, and coffee from Colombia etc. Therefore a country which exports
According to Chancellor Helmut Schmidt the interest rates of the developed countries in the post1990 era were higher than they had ever been "at any time since Jesus Christ" (http://hdr.undp.org/external/HDR_papers/oc3b.htm). In 1983, in Latin America, whose devaluations were enormous, it was recorded that in one year "the effect on the individual private sector, which in [some] cases had been encouraged by the policies of the authorities to borrow, has
Since the 1990s, criticism has mounted regarding the IMF's narrow construction of a 'one size fits all' economic policy. "Policies of privatization and deregulation may work better in developed countries in the West, but, maybe more difficult to implement in the developing world" (Pettinger 2009). There is also alarm that the IMF is excessively directive when extending loans to nations -- for example, mandating user fees for health care, an
International Lending and Financial Crises There has been remarkable growth in the gross and net external positions and international capital flows in the last two decades. This represents growth of nearly three times among industrialized or developed countries and has led to large effects on the valuation of asset price and exchange rates have also changed considerably with these countries having larger external assets and liabilities. This increase in international capital