The International Monetary Fund (IMF) is an international financial institution and a specialized agency of the United Nations, headquartered in Washington, D.C.. It was conceived in July 1944 at the Bretton Woods Conference and officially came into existence in December 1945. The IMF was created to prevent a return to the economic chaos of the inter-war era, specifically the competitive currency devaluations and trade barriers that contributed to the Great Depression. Its core mission is to foster global monetary cooperation, secure financial stability, and act as a lender of last resort to members facing actual or potential balance of payments crises.
The IMF operates under its charter, the Articles of Agreement, adopted on July 22, 1944. Its mechanism is based on a quota system, where each member's contribution determines its voting power and the amount of financing it can obtain. The IMF’s three main functions are surveillance, financial assistance, and capacity development. Surveillance includes annual economic assessments known as Article IV consultations. Financial assistance is provided to members, often with conditionality attached to ensure policy adjustments. The IMF is closely connected to the World Bank, its "twin institution" also established at Bretton Woods. It also manages the Special Drawing Right (SDR), an international reserve asset created in 1969. The Articles of Agreement have been amended seven times. A significant recent change was the 2010 quota and governance reform, which doubled total quotas and realigned their distribution to enhance the influence of emerging market economies. The fundamental purpose of promoting international monetary cooperation remains unchanged.