The main functions of the International Monetary Fund IMF include To promote exchange rate stability...........

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The main functions of the International Monetary Fund (IMF) include

To promote exchange rate stability and orderly exchange arrangements
To assist member countries by temporarily providing financial resources to correct mal-adjustment in their balance of payments (BoPs)
To serve as the regulator of international lending and borrowing from major international financial institutions

Select the correct answer using the codes below.

1 and 2 only

2 and 3 only

1 and 3 only

1, 2 and 3

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Explanation:

Statement 3: There is no international institution that regulates such lending and borrowing. World Bank is one of the largest lenders but it is only a lender, does not regulate the process.

Statement 1 and 2: IMF was set up in 1944 with the main functions as exchange rate regulation, purchasing short- term foreign currency liabilities of the member nations from around the world, allotting special drawing rights (SDRs) to the member nations and the most important one as the bailer to the member economies in the situation of any BoP crisis. Other major functions of the IMF are to facilitate international monetary cooperation and to assist in the establishment of a multilateral system of payments and the elimination of foreign exchange restrictions.