IMF is the Principal International Monetary Institution, established to promote a cooperative and stable global monetary framework. India, which was a borrower from International Monetary Fund and World Bank funds for a long time, has now been selected by the IMF as a lender. This is due to the fact, that the Indian economy is one of the fastest growing economies after a long recession. This article discusses the various roles played by IMF and India's contribution to the IMF.
India, which was a borrower from International Monetary Fund and World Bank funds for a long time, has now been selected by IMF as a lender. According to the press release issued by the Reserve Bank of India, India has been selected by IMF to become a member of its Financial Transaction Plan (FTP) to provide credit. With the recent lending of $43 mn to Indonesia, India had, in the last eight months, lent hard currency of $393 mn. Out of which, India has lent $350 mn to Brazil and another $5 mn to Burundi under FTP. The reason behind it is the buoyant foreign exchange reserves, which crossed the $100-billion mark recently, and a worthy balance of payments situation, which encouraged the IMF to include India as one of the 40-odd countries in its financial transaction plan. Under the FTP, the IMF seeks volunteers from its members, to contribute to other member countries' needs in cash. The FTP requires countries to maintain their hard currency component in the quota at around 25%. This article emphasizes the various roles of IMF and India's contribution to the IMF.
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