Consider the following statements regarding the International Monetary Fund (IMF):

1. The IMF was established in 1944 at the Bretton Woods Conference to promote global monetary cooperation.

2. All IMF member countries have equal voting power, irrespective of their economic size.

3. Special Drawing Rights (SDRs) created by the IMF are a type of international reserve asset that can be exchanged for freely usable currencies among member nations.

Which of the statements given above is/are correct?

The correct answer is option 3.

In News

• The IMF has recently approved $1 billion under its Extended Fund Facility (EFF) for Pakistan, highlighting its role in providing financial stability to member countries in economic distress.

Key Points

• Statement 1: The IMF was indeed established in 1944 at the Bretton Woods Conference to promote monetary cooperation and ensure global financial stability. Hence, Statement 1 is correct.
• Statement 2: IMF voting power is not equal among all members; it is determined by the member’s quota, which is based on economic size and performance. Hence, Statement 2 is incorrect.
• Statement 3: Special Drawing Rights (SDRs) are international reserve assets created by the IMF and can be exchanged among members for freely usable currencies. Hence, Statement 3 is correct.

Additional Information

• The IMF currently has 191 member countries.
• The Board of Governors is the highest decision-making body, while the Executive Board manages daily operations.
• The Managing Director, usually a European, heads the IMF Secretariat.
• The IMF’s headquarters is in Washington, D.C..