The International Monetary Fund and LDC Debt

Publisher Summary This chapter describes the international monetary fund (IMF) and LDC debt. The IMF has been the primary institution responsible for the maintenance of a smoothly operating international monetary system. Through the years, the actions required of the Fund to fulfill this responsibility have changed as the nature of the international monetary system has changed. Until the early 1970s, the Funds primary function was the management of a system of fixed exchange rates. The high volume of international lending and the apparently precarious position of some borrowing nations that have characterized the last few years have led some observers to urge the establishment of some institution to serve as a international lender of last resort. By standing ready to provide financing to countries in need and without access to financing from any other source, this institution would provide some insurance against the sort of contraction of international credit that is postulated as a possible result of a simultaneous failure by several borrowing nations to meet their obligations under existing loan agreements.