Question
Explain the functions of International Monetary Fund. (I. Imp.)
Solution
Functions are as under :
1. Acting as a short term credit institution.
2. Providing machinery for the orderly adjustment of exchange rates.
3. Acting as a reservoir of the currencies of all the member countries, from which a borrower nation can borrow the currency of other nations.
4. Acting as a lending institution of foreign currency and current transaction.
5. Determining value of a country's currency and altering it, if needed, so as to bring about an orderly adjustment of exchange rates of member countries; and
6. Providing machinery for international consultations.
