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Unit 9: International Financial Institutions-I

5. Technical assistance: The Fund also provides technical assistance to its member-countries. notes
The Fund sends its experts on deputation to member-countries to advise them on matters
like exchange control, foreign payments, credit money, central banking and economic
policy, etc. The Fund also publishes many technical journals and magazines.
6. Training: It also imparts short-term training courses to the representatives of member-
countries. This training is imparted to the senior officers of the central banks and Finance
Departments. In 1975, a training centre was set up.
7. Facilities during emergency: Although IMF is opposed to any sort of controls either on
foreign exchange or foreign trade, yet member-countries have been given the right to resort
to these controls during emergency in the hope that they will lift it as early as the situation
warranted.

8. It serves as a short-term credit institution: The Fund removes temporary difficulty
of adverse BOP of any member country. It is a second line of defense. It means that the
member country will maintain its separate foreign exchange reserves and the payments
will be met out of these first and the balance will be given by Fund.
9. The fund provides a mechanism for improving short-term BOP position: For this purpose,
its rules provide for orderly adjustment of exchange. A country can alter its rate of exchange
when it feels that its rate of exchange is out of line with its economy. But this alteration can
be made after the due deliberations with the authorities of the Fund.

10. The fund provides machinery for international consultations: The Fund has provided the
excellent opportunity to the principal countries to sit together and reconcile their conflicting
claims.
11. The fund promotes exchange stability by promoting orderly adjustments of exchange
rates.

Thus, the Fund performs financial, supervisory and controlling functions.
self assessment

Fill in the blanks:
6. The fund provides a mechanism for improving ................ position.
7. The ................ , exchange rate problems and monetary and fiscal issues are the other issues
on which the IMF advises its member countries.
8. In April, 1993, STF was established with $6 billion to help ................ and other Central Asian
Republics to face balance of payments crisis.
9. Fund performs financial, ................ and controlling functions.

10. The credit under ................ is provided to meet the balance of payments deficits.

9.4 World Bank

The International Bank for Reconstruction and Development (IBRD) popularly known as the
World Bank, owes its birth to the deliberations of the United Nations Monetary and Financial
Conference which met at Bretton Woods; New Hampshire. The World Bank was established on
st
1 July 1944. The Headquarters of World Bank is in Washington D. C.
The global war had completely dislocated the multilateral trade and had caused a massive
destruction of life and property. While there existed a need for promptly reconstructing the war
damaged economies, it was also recognized that stable world peace was threatened from the

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