THE IMF Essay Example | Topics and Well Written Essays - 500 words

THE IMF - Essay Example Aside from all of these, the IMF has specific functions and initiatives created to help ensure financial stability in the world. The IMF, with its provision of world liquidity, allows countries to deposit reserves in a form of money, gold, or any convertible foreign currencies that can be used in times of needs or deficit, at least in a short span of time, while finding the resolution of financial problems may be ongoing (Gilpin, 2011, p.246). This initiative could be found under the Special Drawing Rights (SDRs), by which countries should make sure of official reserves as an exchange of IMF’s supplementary actions for its members (International Monetary Fund, 2012). SDRs are â€Å"potential claims on the freely usable currencies of IMF members, so they are â€Å"neither a currency, nor a claim on the IMF† (International Monetary Fund, 2012). In other words, the IMF could provide the best option in providing a country some financial alternatives while it may be still looking for eventual solutions to obtain the desired liquidity. Countries placing reserves at IMF are therefore able to obtain fi nancial assistance especially in times they are in need of restoring financial liquidity. Liberalisation of international free trade is important for economic benefits. After all, international trade by itself affects the world economy. The IMF has a great role to play in the liberalisation of the economy. While regulations and policies are crucial to the success of the liberalisation of international free trade, the IMF considers some important steps in order to guarantee globalisation will work for all. One important actions it comes to consider is a â€Å"successful trade round† (International Monetary Fund, 2001). According to its report, the IMF disclosed information revealing impoverished countries engaged with its policies and facilities to have come to