International Monetary Fund
The International Monetary Fund (IMF) [1] was set up by the Bretton Woods Conference in 1944, mainly to provide loans to member governments in support of policies to deal with balance of payments problems. In recent years it has also devoted its resources to the strengthening of the international financial system and relieving financial crises. It also advises member governments about their economic problems and, when necessary, it grants loans to help resolve them. An IMF loan is usually provided under an arrangement which stipulates the specific policies and measures that a country has agreed to implement to resolve its problem. The economic program underlying an arrangement is formulated by the country in consultation with representatives of the IMF and is presented to the Fund’s governing body as a letter of intent.
The Fund’s Poverty Reduction and Growth Facility (PRGF) [1] provides loans to low-income countries and its Exogenous Shocks Facility [2] gives financial support to low-income countries that do not have a PRGF arrangements. Loans carry an annual interest charge of 0.5 per cent and are repayable over a period starting after five and a half years and end ten years after they are received.
The IMF is financed by contributions from member states that depend upon the size of their economies (the contributions levied in 2007 totaled over $300 billion).
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