International Monetary Fund (IMF):

The IMF, also referred to as The Fund, is an autonomous international financial institution established in 1945 under the Breton Woods Agreement of 1944. Thus, it is a sister institution of the International Bank for Reconstruction and Development (IBRD).

The main objectives of the IMF, set out in article 1 of its articles of Agreement are:

i. To promote international monetary co operations through a permanent institution that provides the 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.

iii. To promote exchange rate stability, to maintain orderly exchange arrangement among members, and to discourage competitive currency devaluation.

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

v. To help member countries overcome their balance of payment difficulties through the provision of short to medium term credit and technical guidance.

The IMF introduced the Special Drawing Rights (SDRs) in 1970 to facilitate the expansion and balanced growth of world trade. The SDRs is an international financial asset designed to supplement gold, dollars, and convertible currencies in setting international debt between countries. Most countries now use their allocation of SDRs (which are mere book entries) when they face balance of payment or reserve problems.