The IMF has been criticised for its policies and actions, from exchange rate regimes to rescues. Some of these criticisms are partly valid. The IMF’s rescues have helped stabilize domestic banking systems and have protected creditors of borrowing countries from loss. However, other critics believe these funds distort pricing of loans and encourage excessive borrowing. Despite these criticisms, the IMF is still an important institution that helps developing countries stabilize their economies and remain competitive.
IMF Board of Governors
The IMF Board of Governors is a multilateral organization that sets policy for the IMF. Its members include 24 executive directors, the IMF’s managing director and 24 alternate governors. These individuals are appointed by member countries, groups and other official levels. They are responsible for the general operations of the IMF. Meetings are held twice a year. The members of the Executive Board meet regularly to carry out their mandates.
IMF Executive Board
The IMF Executive Board conducts the day-to-day business of the IMF and exercises powers delegated by the Board of Governors and the Articles of Agreement. The current Executive Board includes twenty-one members, all elected since January 26, 2016. Five Executive Directors are appointed by the member countries holding the largest quotas. The remaining members elect the remaining nineteen Directors. Each member pays its dues on a yearly basis.
IMF Discount Rate Adjustment
The IMF Discount Rate Adjustment is a measure to reduce the costs of IMF loans to member countries. The DAC uses a base factor of 5% as the basis for adjusting discount rates. This is consistent with the discount rate used by the IMF in 2014. Additional adjustment factors are 1% for LMICs, 2% for LDCs, and 1% for other multilateral organizations and subregional organizations. The DAC reviews these adjustment factors periodically, and the rate of adjustment is typically not greater than one percent.
SBAs
SBAs are a type of financing option under the General Resources Account (GRA) that allows the IMF to extend loans to countries in need of assistance. The loan facility has flexible conditions and is typically for twelve to 24 months. In exceptional circumstances, countries may access more than normal amounts, but this is governed by an Exceptional Access policy. Front-loaded access is also possible, but only when a country has a pressing need for additional financing.
EFFs
IMF EFFs are designed to help countries implement structural reforms. Generally, these programs are not formulated on a precautionary basis in advance of a future balance of payments crisis. This flexibility allows countries to draw the full amount they have committed to an EFF if necessary. However, it is important to note that a country can only access all of its EFF resources if it meets certain conditions. For this reason, it is important to monitor the results of EFFs to ensure that they are achieving their intended outcomes.
Article IV staff evaluations of member countries
The IMF has a process for evaluating the health of a country’s economy and financial policies. The process is conducted on an annual or semi-annual basis. Ireland has regularly engaged with the IMF through this process. This process focuses on medium and long-term economic policy. In April and May 2021, the process was held virtually. However, due to the pandemic, the process was postponed. It will take place again in 2022.
