International Monetary Fund

The International Monetary Fund (IMF) helps member countries manage external-payment difficulties and supports stability in the international monetary system. Its central crisis-related mandate is to provide temporary financing, policy advice and capacity development so that a country can correct a balance-of-payments disequilibrium without resorting to measures harmful to national or international prosperity.

Legal mandate

Under Article I of the IMF’s Articles of Agreement, the Fund promotes monetary cooperation, exchange stability and a multilateral payments system. It may make its resources temporarily available under adequate safeguards to help members correct balance-of-payments maladjustments and shorten the duration and lessen the degree of external disequilibrium.

How the IMF addresses a crisis

• Through Article IV surveillance, the IMF assesses members’ macroeconomic and exchange-rate policies, identifies external vulnerabilities and recommends corrective action.
• At a member’s request, the IMF can provide balance-of-payments financing. Unlike development-bank lending, this generally supports the country’s overall external financing needs rather than a specific project.
• Financing is commonly disbursed in phases and linked to agreed policy measures and programme reviews. These conditions seek to restore external viability and macroeconomic stability while safeguarding IMF resources.
• IMF support can provide breathing space for adjustment and may help restore confidence, but durable recovery depends on domestic reforms, adequate financing and sustainable debt.

Scope and limits

IMF assistance is temporary and normally requires the member government to request support and adopt an adjustment programme. The Fund supplies financing and policy support, but it does not replace domestic economic management or permanently finance external deficits.

• The scale and terms of assistance vary with the financing facility, the country’s needs and its capacity to repay.
• Low-income members may access concessional support through IMF trust-based facilities.