The Role of IMF and its Impact on Latvia and Argentina
|History and role of the IMF||5|
|2.2.||History of the IMF||5|
|2.3.||Role and features of the IMF||9|
|3.1.||Conditionality of the IMF||13|
|3.2.||IMF and its effect on macroeconomic tools||16|
|3.3.||IMF lending to developing countries||19|
|5.1.||Argentina results and findings||25|
|5.2.||Latvia results and finds||30|
|Recommendations and conclusions||34|
The International Monetary Fund (IMF) is an international institution that upon till the current global crisis many people had never heard of or understood its role. At the present time IMF’s role has never been so important with it giving financial help to many countries. The IMF comprises of 186 countries, all countries paying in to it. The more a country pays in to the Fund the more say it has. The Funds headquarters are in Washington D.C, United States. (imf.org a 2010)
The IMF’s primary role is to oversee the countries macroeconomic policies, to help countries with their balance of payments to restore their economies and create economic growth. The financial assistance helps countries to stabilize their currencies and assists with payment of imports thus preventing trade restrictions. (imf.org, b 2010)
When a country gets a loan from an IMF it can be subject to terms and conditions which the IMF can impose on it. If the country complies with these conditions and repays the loan successfully then it is likely that other banks and financial institutions will look favourably on it and perhaps encourage new investment in the country. If the country fails to comply with the conditions IMF can withhold the next payment until they do.
1.1 Why this topic?
This topic was chosen because the IMF’s role in the global economy is vital as so many countries are relying on it. If it is to be successful the money it lends must serve its purpose. Public awareness of the IMF might help them to understand what is happening in their countries after they have borrowed from it and more importantly understand that in the long run it could be to their benefit.
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