The purpose of IMF is to consult with one another to maintain a table system of buying and selling the currencies, so that payments in foreign money can take place between countries smoothly and timely. The IMF lends money to members who have trouble meeting financial obligations to other members, on the condition that they undertake economic reforms to eliminate these difficulties for their own good and the good of the entire membership.
In total the main tasks of the IMF are:
In total the main tasks of the IMF are:
* to promote international cooperation by providing the means for members to consult and collaborate on international monetary issues;
* to facilitate the growth of international trade and thus contribute to high levels of employment and real income among member nations;
* to promote stability of exchange rates and orderly exchange agreements, and [to] discourage competitive currency depreciation;
* to foster a multilateral system of international payments, and to seek the elimination of exchange restrictions that hinder the growth of world trade;
* to make financial resources available to members, on a temporary basis and with adequate safeguards, to permit them to correct payments imbalances without resorting to measures destructive to national and international prosperity.
To execute these goals the IMF uses such instruments as Reserve tranche which allows a member to draw on its own reserve asset quota at the time of payment, Credit tranche drawings and stand-by arrangements are the standard form of IMF loans, the compensatory financing facility extends financial help to countries with temporary problems generated by reductions in export revenues, the buffer stock financing facility which is geared toward assisting the stocking up on primary commodities in order to ensure price stability in a specific commodity and the extended facility designed to assist members with financial problems in amounts or for periods exceeding the scope of the other facilities.
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