The World Bank and the International Monetary Fund (IMF) were born out of the post-World War II Bretton Woods conference designed to correct “failures” in international capital markets that prevented global capital from flowing to the right destinations, particularly poor countries. The IMF was to ensure exchange rate stability and provide liquidity to the new pegged exchange rate system by making short-term loans to countries to address their balance of payments problems. The IMF or the Fund was to be an agency that would ensure international financial stability while the World Bank was to provide lon-term loans for reconstruction and development.

Every member country contributes a portion of its national income to the IMF, against which it is eligible to borrow. The Central Bank or Treasury ...

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