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International

Monetary Fund Group 3

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The concept of IMF

foster global monetary cooperation

secure financial stability

facilitate international trade

sustainable economic growth

reduce poverty around the world

an organization of 185 countries

main goal is to ensure the stability of the international monetaryand financial system

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Governance StructureThe IMF's mandate and governance have evolved along with changes in theglobal economy, allowing the organization to retain a central role within the

international financial architecture.

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The process of IMF lending

the Board approvethe arrangementand release theloan in phased

installments

present anarrangementto the Funds

Executive Board ina Letter of Intent

request bya member

country

Repay the loanwithin five years

http://www.imf.org/external/np/sec/memdir/eds.htmhttp://www.imf.org/external/np/loi/mempub.asp?view=loi&sort=ctyhttp://www.imf.org/external/np/loi/mempub.asp?view=loi&sort=ctyhttp://www.imf.org/external/np/sec/memdir/eds.htm

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The SDR is an international reserve asset, created by theIMF in 1969 to supplement the existing official reserves of

member countries.SDRs are allocated to member countries in proportion totheir IMF quotas. The SDR also serves as the unit ofaccount of the IMF and some other international

organizations.

Its value is basedon a basket ofkey internationalcurrencies.

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As we all know that the global crisis is hitting emergingmarket and poor countries hard , the G-20 FinancialSummit has held to make the leaders agreement tosupport global growth and strengthen financial regulation .

During the summit ,china and other developing countrieswanted to make some changes to the SDRs and the IMFitself.

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IMF Resources and the G-20

Summit

world leaders pledged to support growthin emerging market and developing countries

increase the resources available to the IMF by$250 billion

use additional resources to provide $6 billionin additional financing for poor countries

support $250 billion to boost global liquidity

urged urgent ratification of the Fourth Amendment tothe IMF's Charter

http://www.londonsummit.gov.uk/resources/en/news/15766232/communique-020409http://www.londonsummit.gov.uk/resources/en/news/15766232/communique-020409

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(1) Expand the issue of SDRs and increase the financingof IMF ,in order to strengthen the process of SDRsand IMF.

Here are some changes :

(2) The quota of IMF should be changed ,the quota of theinnovation-centric economies and developing economiesshould be gained.

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(3) The role of the SDRs has not been put into full play dueto limitation on its allocation and the scope of its uses,Chinahas called for the creation of new global currency by the IMF,possibly the revival of the SDRs, to replace the US dollars

as the new global currency.

(4) India and China are draftinga new proposal that wouldrequire the IMF sell all of itsgold ,in order to increaseliquidity of the IMF fund andhelp the poorest countries.

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According to these changes the countries wanted ,IMF has adopted them.

(1) Among the additional funds to be injected intointernational financial institutions, 500 billion dollars willgo to the International Monetary Fund (IMF) for it to lend

to countries hit hard by the financial crisis, Of theadditional funding for the IMF, 40 billion dollars will comefrom China, 100 billion from the EU, and 100 billion fromJapan, according to Brown.

(2) 250 billion dollars will be used to support a new SpecialDrawing Rights (SDR) , 100 billion dollars will supportadditional lending by the multilateral development banks,and 250 billion dollars will be devoted to guarantee tradefinance.

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(3) The IMF will thinkabout selling its gold tohelp the poor countries inthe world.

(4) The IMF will take actions togive the developing countries

and new economies moreaudiences, the tradition thatUnited States and EU separatein control of IMF will be broke

down , the person in charge willbe anyone who is sagacious.

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Strings attached

not to influence the

debtor countries

and push the reform

of the IMF quota

example of dealing

with the worsening

global economic

crisis

China and other

developing countries

wish to obtain the

no strings attached

loan

have more votes in

the IMF deliberations

And has access to more

foreign exchange

exchange it has

meansadditional

conditions

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The IMFs Income model

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