Previous Year Question
With reference to the International Monetary and Financial Committee (IMFC), consider the following statements:
IMFC discusses matters of concern affecting the global economy and advises the International Monetary Fund (IMF) on the direction of its work.
The World Bank participates as an observer in IMFC’s meetings.
Which of the statements given above is/are correct?
1 only
2 only
Both 1 and 2
Neither 1 nor 2
Correct Answer: C
Detailed Solution
Statement 1 is correct. The IMFC advises and reports to the IMF’s Board of Governors on the supervision and management of the international monetary and financial system. Its mandate includes examining global economic developments and responding to events that could disrupt the international monetary and financial system.
The IMFC does not possess formal decision-making powers. In practice, however, its conclusions and statements provide strategic direction to the IMF’s policies and work programme. It operates by consensus and issues a statement after each meeting.
Statement 2 is also correct. Several international organisations, including the World Bank, participate in IMFC meetings as observers. Therefore, the World Bank’s observer participation is correctly stated.
Important facts about the IMFC:
It was established on 30 September 1999 through a resolution of the IMF Board of Governors.
It succeeded the Interim Committee, which had been created in 1974.
It normally meets twice a year during the IMF-World Bank Spring Meetings and Annual Meetings.
It currently has 25 members, normally finance ministers, central bank governors or officials of comparable rank.
Its composition mirrors the constituency structure of the IMF Executive Board and collectively represents all 191 IMF member countries.