The International Monetary Fund (IMF) is an international financial institution and a specialized agency of the United Nations. The IMF was planned and proposed in July 1944 at the Bretton Woods Conference and began financial operations on March 1, 1947. The IMF was established to promote international monetary cooperation, facilitate expansion and balanced growth in international trade, and maintain exchange arrangements among its members. To achieve its mission goals, the IMF monitors economic and financial developments in member countries and offers policy advice to governments. The IMF also provides loans, financial aid, and technical assistance to member countries.
Initially, the IMF established a par value for the value of the U.S. dollar in terms of gold and member countries agreed to established exchange rates in terms of the U.S. dollar. This par value system—also known as the Bretton Woods system—lasted until 1971, when the U.S. government suspended the convertibility of the dollar and dollar reserves held by other governments into gold.
Typically, the IMF will offer a lending package to a member country requesting financial support in exchange for an agreed program of economic policies aimed at preventing repeated crises. After a loan is approved, the IMF monitors implementation of the policy agenda and seeks to ensure repayment of funds.
As of 2023, the IMF has 190 members and controls over USD $1 trillion in assets available to member countries during economic crises.
[Last updated in June of 2023 by the Wex Definitions Team]