International Organizations (Part – III)

India is among the founding members of IMF and the World Bank. India became the member of IMF and the World Bank on 27 December 1945. Principality of Andorra became Bank 190th member of IMF on October 16, 2020.

As on June 2024, India holds 2.75 percent of special drawing rights (SDRs) quota, and 2.63 percent of votes in the IMF.

The reserve tranche represents the member's unconditional drawing right on the IMF, created by the foreign exchange portion of the quota subscription, plus increase (decrease) through the IMF's sale (repurchase) of the member's currency to meet the demand for use of IMF resources by other members in need of balance of payments financing. The reserve tranche is basically an emergency account that IMF members can access at any time without agreeing to conditions or paying a service fee. Initially, member nations' reserve tranches are normally 25% of their quota. However, their reserve tranche position (RTP) can change according to any lending that the IMF does with its holding of the member's currency. It is to be noted that prior to 1978, the reserve tranche was paid in, which was non-interest bearing and known as gold tranche.

The Rapid Financing Instrument (RFI) of International Monetary Fund (IMF) provides rapid financial assistance, which is available to any IMF member countries facing an urgent balance of payments need. The RFI was created as part of a broader reform to make the IMF's financial support more flexible to address the diverse needs of member countries and can be used in a wide range of circumstances.

The Rapid Credit Facility (RCF) of IMF provides rapid concessional financial assistance to low-income countries (LICs) facing an urgent balance of payments need with no ex-post conditionality where a full-fledged economic pro- gram is neither necessary nor feasible. The RCF was created under the Poverty Reduction and Growth Trust (PRGT) as part of a broader reform to make the Fund's financial support more flexible and better tailored to the diverse needs. of LICs, including in times of crisis.

The RFI is available to all member countries, although mem- ber countries eligible for the Poverty Reduction and Growth Trust are more likely to use the similar, concessional RCF.

The term 'paper gold' refers to Special Drawing Rights (SDR) of IMF. The SDR is an international reserve asset that member countries can add to their foreign currency and gold reserves and use for payments requiring foreign exchange. It refers to the assets transferred by the IMF to its member countries as lending. It is the currency (unit of account) of the IMF and due to its acceptability, it is referred as paper gold.

The term 'paper gold' refers to Special Drawing Rights (SDR) of IMF. The SDR is an international reserve asset that member countries can add to their foreign currency and gold reserves and use for payments requiring foreign exchange. It refers to the assets transferred by the IMF to its member countries as lending. It is the currency (unit of account) of the IMF and due to its acceptability, it is referred as paper gold.

The SDR (Special Drawing Rights) is an international reserve asset, created by the IMF in 1969 to supplement its member countries' official reserves. The SDR was initially defined in terms of gold, but after the collapse of the Bretton Woods System in 1973, it was redefined as a basket of currencies. The SDR basket is reviewed generally every five years (or earlier if warranted) and during the review concluded in November 2015, the IMF Executive Board decided that the Chinese renminbi (RMB Yuan) met the criteria for SDR basket inclusion. Following this decision, the Chinese renminbi joined the US dollar, euro, Japanese yen, and British pound sterling in the SDR basket, effective October 1, 2016.

The 'World Economic Outlook' is published by International Monetary Fund (IMF). It is usually published twice and partly updated 2 times a year. "Human Development Report' is published by UNDP and 'World Development Report' is published by the World Bank, while 'Global Competitiveness Report' is released by the World Economic Forum.

'Global Financial Stability Report' is prepared by the International Monetary Fund (IMF). The report is released twice in a year in the month of April and October. The report provides an assessment of the global financial system and markets, and addresses emerging market financing in a global context. It focuses on current market conditions, highlighting systematic issues that could pose a risk to financial stability and sustained market access by emerging market borrowers.

Indian Origin Professor of Harvard University, Gita Gopinath was appointed as Economic Counsellor and Director of the IMF's Research Department (Chief Economist of the IMF) in October, 2018. She assumed office on 1 January, 2019. At Present, she is the First Deputy Managing Director (Since 21 January, 2022) of the IMF.