- International Monetary Fund
- Published Date:
- October 2010
The International Monetary Fund
The IMF is the world’s central organization for international monetary cooperation. With 187 member countries (as of June 2010), it is an organization in which almost all of the countries in the world work together to promote the common good. The IMF’s primary purpose is to safeguard the stability of the international monetary system-the system of exchange rates and international payments that enables countries (and their citizens) to buy goods and services from one another. This is essential for achieving sustainable economic growth and raising living standards.
All of the IMF’s member countries are represented on its Executive Board, which discusses the national, regional, and global consequences of each member’s economic policies. This Annual Report covers the activities of the Executive Board and Fund management and staff during the financial year May 1, 2009, through April 30, 2010.
The main activities of the IMF include
providing advice to members on adopting policies that can help them prevent or resolve a financial crisis, achieve macroeconomic stability, accelerate economic growth, and alleviate poverty;
making financing temporarily available to member countries to help them address balance of payments problems-that is, when they find themselves short of foreign exchange because their payments to other countries exceed their foreign exchange earnings; and
offering technical assistance and training to countries at their request, to help them build the expertise and institutions they need to implement sound economic policies.
The IMF is headquartered in Washington, D.C., and, reflecting its global reach and close ties with its members, also has offices around the world.
Additional information on the IMF and its member countries can be found on the Fund’s website, www.imf.org.
Ancillary materials for the Annual Report–Web Boxes, Web Tables, Appendixes (including the IMF’s financial statements for the financial year ended April 30, 2010), and other pertinent documents-can be accessed via the Annual Report web page at www.imf.org/external/pubs/ft/ar/2010/eng. Print copies of the financial statements are available from IMF Publication Services, 700 19th Street, N.W., Washington, DC 20431. A CD-ROM version of the Annual Report, including the ancillary materials posted on the web page, is also available from IMF Publication Services.
The IMF’s financial year is May 1 through April 30.
The unit of account of the IMF is the SDR; conversions of IMF financial data to U.S. dollars are approximate and provided for convenience. On April 30, 2010, the SDR/U.S. dollar exchange rate was US$1 = SDR 0.661762, and the U.S. dollar/SDR exchange rate was SDR 1 = US$1.51112. The year-earlier rates (April 30, 2009) were US$1 = SDR 0.667632 and SDR 1 = US$1.49783.
“Billion” means a thousand million; “trillion” means a thousand billion; minor discrepancies between constituent figures and totals are due to rounding.
As used in this Annual Report, the term “country” does not in all cases refer to a territorial entity that is a state as understood by international law and practice. As used here, the term also covers some territorial entities that are not states but for which statistical data are maintained on a separate and independent basis.
Message from the Managing Director and Chair of the Executive Board
As I reflect on the past year, one key lesson comes to mind: the economic policy collaboration that served the world so well during the crisis must be sustained. This is really one of the great legacies of the crisis-perhaps for the first time in history, countries came together in a spirit of solidarity to face common problems with common solutions.
The global economy is recovering, even if the crisis is not yet completely behind us. Some countries are growing strongly, while others are seeing much weaker rebounds, and risks to global growth have once again risen in recent months. In this globalized world, events that start in a single country can have repercussions far beyond that country. The challenges ahead are great-especially in terms of reigniting strong, sustainable, and balanced growth and creating jobs. Now more than ever, the unity of purpose that guided world leaders during the crisis must be maintained. Of course, cooperation does not mean uniformity, and diverse policies must respond to diverse challenges.
Dominique Strauss-Kahn, IMF Managing Director and Chair of the Executive Board.
During the crisis, the IMF supported policy cooperation, striving to respond effectively to the serious challenges faced by our membership. We committed more than US$200 billion in lending and pumped another US$283 billion in SDRs into the system. Our new Flexible Credit Line provided a strong safety net for countries with exemplary records. Since the crisis began in 2008, we have tripled our concessional lending commitments to low-income countries, charging zero interest through 2012. And we emphasized country ownership by making our lending programs more flexible, streamlining policy conditions, and being responsive to the needs of the most vulnerable groups in crisis countries.
I believe our efforts helped soften the blow of the crisis. In program countries, output losses were smaller relative to past crises, and the kinds of wrenching adjustment seen in the past-large movements in exchange rates and interest rates-were avoided. Spreads narrowed for the countries with arrangements under the Flexible Credit Line. And in most cases, including among low-income countries, fiscal policy was able to act as a brake on the economic downturn.
As we look to the future, the IMF needs to become even more responsive and effective in addressing the new challenges facing our membership. Last year in Istanbul, the International Monetary and Financial Committee asked us to address four key reform areas: our mandate, our financing role, multilateral surveillance, and governance. We have made much progress over the past year. On surveillance, we must be seen as both a truth-teller and a trusted policy advisor. We need to focus more on systemic and cross-country issues, to take advantage of our true value added. And on lending, we are examining several options to strengthen global financial safety nets to help prevent crises and mitigate systemic shocks. These reforms are ongoing and reflect our continuing efforts to adapt our mandate to the realities of the modern world.
Finally, we need to forge ahead with quota and governance reforms, to give a greater voice to the dynamic emerging markets and developing countries that are becoming ever more important in the global economy. This is a difficult and complex area, but I am confident we can make further progress by the end of the year. These reforms will help build a more relevant IMF, a more legitimate and truly representative IMF, and-above all-a more effective IMF.
I am proud of the IMF’s accomplishments over the past year, and I look forward to continuing to work with our membership to address the pending challenges facing the global economy.
The Annual Report of the IMF’s Executive Board to the Fund’s Board of Governors is an essential instrument in the IMF’s accountability. The Executive Board is responsible for conducting the Fund’s business and consists of 24 Executive Directors appointed by the IMF’s 187 member countries, while the Board of Governors, on which every member country is represented by a senior official, is the highest authority governing the IMF. The publication of the Annual Report represents the accountability of the Executive Board to the Fund’s Board of Governors.
Letter of Transmittal to the Board of Governors
July 29, 2010
Dear Mr. Chairman:
I have the honor to present to the Board of Governors the Annual Report of the Executive Board for the financial year ended April 30, 2010, in accordance with Article XII, Section 7(a) of the Articles of Agreement of the International Monetary Fund and Section 10 of the IMF’s By-Laws. In accordance with Section 20 of the By-Laws, the administrative and capital budgets of the IMF approved by the Executive Board for the financial year ending April 30, 2011, are presented in Chapter 5. The audited financial statements for the year ended April 30, 2010, of the General Department, the SDR Department, and the accounts administered by the IMF, together with reports of the external audit firm thereon, are presented in Appendix VI, which appears on the CD-ROM version of the Report, as well as at www.imf.org/external/pubs/ft/ar/2010/eng/index.htm. The external audit and financial reporting processes were overseen by the External Audit Committee, comprising Mr. Thomas O’Neill, Mr. Ulrich Graf, and Ms. Amelia Cabal, as required under Section 20(c) of the Fund’s By-Laws.
Managing Director and Chair of the Executive Board