What Role Does the Imf Play in the World Economy? What Are the Main Costs and Benefits of Imf Adjustment Policies?

2146 Words Oct 19th, 2008 9 Pages
The International Monetary Fund (IMF) is the world's central organization for international monetary cooperation. It is an organization in which almost all countries in the world work together to promote the common good (IMF 2006). That’s IMF is an international organization that oversees the global financial system by observing exchange rates and balance of payments, as well as offering financial and technical assistance. The primary purpose of IMF is to ensure the stability of the international monetary system in order to sustainable economic growth and rising living standards of the member countries. And IMF also granting short-term loans and promotes free-trade to conserve foreign exchange reserves.
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IMF developed standards and codes of good practice in economic policymaking, financial sector regulation and supervision, statistical collection and dissemination, and other areas (IMF 2006). The IMF’s data standards initiatives encourage their member to make reliable, timely and comprehensive statistics available to the public. Therefore, the inventors are able to make well-informed decisions. It improved the functioning of financial markets. Also, it reduced the probability of crises. In 1996, IMF launched the Special Data Dissemination System (SDDS). SDDS help IMF to provide guidance to member countries who wish to gain access to international capital markets on the dissemination of data. In 1997, IMF launched the General Data Dissemination system (GDDS) to help the countries that are not yet in a position to subscribe to the SDDS and need to improve their statistical system. The primary objective of the GDDS is to encourage IMF member countries to build a framework to improve data quality and increase statistical capacity building. Participation in both systems is voluntary. And some entities who are non-IMF members also contribute statistical data to the systems, Such as Hong Kong using GDDS and European Union using SDDS.
The IMF also developed vulnerability indicators and early warning system (EWS) models to improve the ability to identify countries at risk. The indicators included, indicators of external and domestic debt, indicators of