Editing International Monetary Fund (section)

== Functions ==
[[File:Board of Governors International Monetary Fund.jpg|thumb|Board of Governors International Monetary Fund (1999)]]
According to the IMF itself, it works to foster global growth and [[economic stability]] by providing policy advice and financing to its members. It also works with [[developing country|developing countries]] to help them achieve macroeconomic stability and reduce poverty.<ref>{{cite web |title=About the IMF |url=http://www.imf.org/external/about.htm |publisher=International Monetary Fund |access-date=12 March 2012 |archive-date=28 March 2014 |archive-url=https://web.archive.org/web/20140328154323/https://www.imf.org/external/about.htm |url-status=live }}</ref> The rationale for this is that private international capital markets function imperfectly and many countries have limited access to financial markets. Such market imperfections, together with balance-of-payments financing, provide the justification for official financing, without which many countries could only correct large external payment imbalances through measures with adverse economic consequences.<ref name="What's Wrong">{{cite book |last1=Isard |first1=Peter |title=Globalization and the International Financial System: What's Wrong and What Can be Done |year=2005 |publisher=Cambridge University Press |location=New York }}</ref> The IMF provides alternate sources of financing such as the [[Poverty Reduction and Growth Facility]].<ref name="PRGF info">{{cite news |last1=Shahwan |first1=Najla |title=What's the goal of IMF's new fund for low-income countries? |url=https://www.dailysabah.com/opinion/op-ed/whats-the-goal-of-imfs-new-fund-for-low-income-countries |access-date=18 January 2023 |publisher=Daily Sabah |date=2 May 2022 |archive-url=https://web.archive.org/web/20220504093856/https://www.dailysabah.com/opinion/op-ed/whats-the-goal-of-imfs-new-fund-for-low-income-countries |archive-date=4 May 2022 |url-status=live }}</ref>

Upon the founding of the IMF, its three primary functions were: 
* to oversee the [[fixed exchange rate system|fixed exchange rate]] arrangements between countries,<ref name="Jensen 2004, April, Issue 48">{{cite journal |last1=Jensen |first1=Nathan |title=Crisis, Conditions, and Capital: The Effect of the IMF on Direct Foreign Investment |journal=Journal of Conflict Resolution |date=April 2004 |issue=2 |doi=10.1177/0022002703262860 |volume=48 |pages=194–210 |s2cid=154419320 }}</ref> thus helping national governments manage their [[exchange rate]]s and allowing these governments to prioritize economic growth,<ref name="chorev">{{cite journal |last1=Chorev |first1=Nistan |author2=Sarah Babb |title=The crisis of neoliberalism and the future of international institutions: a comparison of the IMF and the WTO |journal=Theory and Society |doi=10.1007/s11186-009-9093-5 |volume=38 |issue=5 |pages=459–484 |date=2009 |s2cid=55564202 }}</ref> and
* to provide short-term capital to aid the [[balance of payments]]<ref name="Jensen 2004, April, Issue 48" /> and prevent the spread of international [[financial crisis]].
* to help mend the pieces of the international economy after the [[Great Depression]] and [[World War II]]<ref>{{cite journal |last1=Lastra |first1=Rosa Maria |date=2000 |title="The International Monetary Fund in Historical Perspective." |url=https://academic.oup.com/jiel/article/3/3/507/829415 |journal=Journal of Economic Law |volume=3 |issue=3 |pages=507–523 |doi=10.1093/jiel/3.3.507 |url-access=subscription }}</ref> as well as to provide capital investments for economic growth and projects such as [[infrastructure]].{{citation needed|date=February 2023}}

The IMF's role was fundamentally altered by the [[floating exchange rate]]s after 1971. It shifted to examining the economic policies of countries with IMF loan agreements to determine whether a shortage of capital was due to [[business cycle|economic fluctuations]] or economic policy. The IMF also researched what types of government policy would ensure economic recovery.<ref name="Jensen 2004, April, Issue 48"/> A particular concern of the IMF was to prevent financial crises, such as those in [[Mexico]] in 1982, [[Brazil]] in 1987, the [[1997 Asian financial crisis]], and the [[1998 Russian financial crisis]], from spreading and threatening the entire global financial and currency system. The challenge was to promote and implement a policy that reduced the frequency of crises among emerging market countries, especially the middle-income countries which are vulnerable to massive capital outflows.<ref>{{cite journal |last1=Fischer |first1=Stanley |title=Financial Crises and Reform of the International Financial System |journal=Review of World Economics |volume=139 |pages=1–37 |date=March 2003 |url=http://www.nber.org/papers/w9297.pdf |doi=10.1007/BF02659606 |archive-url=https://web.archive.org/web/20170706182931/http://www.nber.org/papers/w9297.pdf |archive-date=6 July 2017 |url-status=live }}</ref> Rather than maintaining a position of oversight of only exchange rates, their function became one of surveillance of the overall macroeconomic performance of member countries. Their role became a lot more active because the IMF now manages economic policy rather than just exchange rates.{{citation needed|date=February 2023}}

In addition, the IMF negotiates conditions on lending and loans under their policy of [[conditionality]],<ref name="Jensen 2004, April, Issue 48" /><ref>{{cite journal |last1=Babb |first1=Sarah L. |last2=Carruthers |first2=Bruce G. |date=2008 |title=Conditionality: Forms, Function, and History |url=https://www.annualreviews.org/doi/10.1146/annurev.lawsocsci.4.110707.172254 |journal=Annual Review of Law and Social Science |volume=4 |issue=1 |pages=13–29 |doi=10.1146/annurev.lawsocsci.4.110707.172254 |issn=1550-3585 |access-date=30 April 2024 |archive-date=22 October 2022 |archive-url=https://web.archive.org/web/20221022003709/https://www.annualreviews.org/doi/10.1146/annurev.lawsocsci.4.110707.172254 |url-status=live |url-access=subscription }}</ref> which was established in the 1950s.<ref name="chorev" /> [[developing country|Low-income countries]] can borrow on [[Loan#Concessional|concessional terms]], which means there is a period of time with no interest rates, through the Extended Credit Facility (ECF), the Standby Credit Facility (SCF) and the Rapid Credit Facility (RCF). Non-concessional loans, which include interest rates, are provided mainly through the [[IMF Stand-By Arrangement|Stand-By Arrangements]] (SBA), the Flexible Credit Line (FCL), the Precautionary and Liquidity Line (PLL), and the Extended Fund Facility. The IMF provides emergency assistance via the Rapid Financing Instrument (RFI) to members facing urgent balance-of-payments needs.<ref>{{cite web |title=Factsheet: IMF Lending |url=http://www.imf.org/external/np/exr/facts/howlend.htm |work=About the IMF |publisher=International Monetary Fund |access-date=8 April 2012 |archive-date=9 June 2017 |archive-url=https://web.archive.org/web/20170609114556/http://www.imf.org/external/np/exr/facts/howlend.htm |url-status=live }}</ref>