International Monetary Law

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     International monetary law is derived from treaty law and role of custom is a best marginal. Although international monetary regulation maybe effected at both the international and regional level there is little doubt that the dominant institution is International Monetary Fund (IMF).

      International Monetary Fund (IMF), international economic organization whose purpose is to promote international monetary cooperation to facilitate the expansion of international trade. The IMF operates as a United Nations specialized agency and is a permanent forum for consideration of issues of international payments, in which member nations are encouraged to maintain an orderly pattern of exchange rates and to avoid restrictive exchange practices. The IMF was established, along with the International Bank for Reconstruction and Development, at the UN Monetary and Financial Conference held in 1944 at Bretton Woods, New Hampshire. The IMF began operations in 1947. Membership is open to all independent nations and included 183 countries in 2001.

            Members who have temporary balance-of-payments difficulties may apply to the fund for needed foreign currency from its pool of resources, to which all members have contributed through payment of their quota subscriptions. The member may use this foreign exchange for a certain time (up to about five years) to extricate itself from its balance-of-payments problem, after which the currency is to be returned to the IMF's pool of resources. The borrower pays a below-market rate of interest for the IMF resources it uses; the member whose currency is used receives almost all of these interest payments; the remainder goes to the fund for operating expenses.

            The board of governors, made up of leading monetary officials from each of the member nations, is the highest authority in the IMF. Day-to-day operations are the responsibility of the 24-member executive board, which represents member nations individually (for larger countries) or in groups. The managing director serves as chairperson of the executive board. The IMF has its main headquarters in Washington, D.C.

            The principle purpose of the IMF is to facilitate the expension and balanced growth of International trade to contribute thereby to the promotion and maintenance of high levels of employment and this is to  be secured by stable exchange rates, financial discipline and the avoidance of balance of payments disequilibrium. The regulatory power of the IMF is exercised through regular surveillance and through measures recommended when any member state seeks the help of the fund.

            The formal legal sources of the International Monetary Fund comprise: (1) the articles of Agreement; (ii) relevant by laws;(iii) resolutions of the Board of Governors; (iv) decisions of the executive Board and ; directives of the managing directors. In respects of internal constitution the IMF operates through a board of Governors, an Interim Committee, an executive Board of Director. In addition , there is development Committee which advises the IMF and the Governors of the World  Bank onmetters concerning developing countries. On joining

            In matters of dispute settlement there has been a remarkable lack of litigation. Decision of the Executive Board can principle be referred to the Board Governors. The fund has authority to seek advisory opinion from the international Court of Justice on any relevant legal question pertaining to jurisdiction however none has been requested so far. The article contain a number of sanction against the member states in breach , voting rights can be suspended and member states may refused access to the fund. The IMF traditionally co-operetes closely with World Bank Group and now seeks to work with the World Trade Organization, its relationship with the United Nations is governed by formal agreement.

            One of the principle concerns of the international community has been respect of te movement of exchange rates . it is arguable that customary law a state had the entitlement to determine the value currency.

            The objective of the IMF was not restricted to securing exchange rate stability; the principle purpose was to facilitate the expension and balanced growth of International trade and this could only be done by minimizing the incidence of exchange Control.

Source : Taken from various sources