Which of the following are the main objectives of establishment of International Monetary Fund (IMF)?

A. To provide long-term funds at concession rates to the poorest member countries.
B. To promote the development of Private enterprises in member countries.
C. To regulate the exchange rates and enforce the rules.
D. To promote exchange stability, maintaining orderly exchange arrangements and avoiding competitive exchange devaluation.
E. To assist in establishment of a multilateral system of payments in respect of current transactions between members.

Choose the correct answer from the options given below:

Correct option is D

The main objectives of the IMF are:

1. C. To regulate exchange rates and enforce rules:

   • The IMF monitors exchange rates and ensures that member countries follow agreed-upon rules to maintain stability in global trade and payments.

2. D. To promote exchange stability:

   • One of the key objectives is to stabilize exchange rates, ensure orderly exchange arrangements, and avoid competitive devaluations that could destabilize international markets.

3. E. To assist in establishing a multilateral system of payments:

   • The IMF helps in facilitating international trade and payments between member countries by promoting a stable and multilateral payment system.

A and B are incorrect because:

• A (Providing long-term funds): The IMF provides short- to medium-term financial assistance, not long-term concessionary funds, which are the responsibility of the World Bank.
• B (Promoting private enterprises): While the IMF indirectly supports economic development, promoting private enterprises is not its primary objective; this is more aligned with organizations like the International Finance Corporation (IFC).

Thus, the correct answer is C, D, and E Only.

Information Booster:

IMF Objectives in Brief:

1. Promoting International Monetary Cooperation: Encouraging collaboration among member countries for a stable global economy.
2. Facilitating Balanced Trade Growth: Supporting economic stability for international trade expansion.
3. Providing Financial Assistance: Offering temporary support to countries facing balance of payments crises.

Additional Knowledge:

​A (Providing long-term funds at concession rates): Incorrect because the IMF primarily provides short- to medium-term financial assistance to address balance of payments issues, whereas long-term concessional funding is the domain of the World Bank.

B (Promoting private enterprises): Incorrect because promoting private enterprises is not the IMF's focus; it aims at macroeconomic stability and financial systems rather than microeconomic activities like enterprise development, which is more aligned with the International Finance Corporation (IFC).