The basic purpose and primary task of the International Monetary Fund is to stabilize the international exchange rate, eliminate foreign exchange controls that hinder world trade, promote international cooperation on monetary issues, and solve the foreign exchange fund needs of member countries with temporary balance of payments deficits by providing short-term loans. The main business activities of the International Monetary Fund include: providing loans to members, promoting international cooperation on monetary issues, studying related issues of the reform of the international monetary system, studying and expanding the role of the International Monetary Fund, providing technical assistance, and strengthening ties with other international institutions.

Currency that plays a universal equivalent role in international commodity circulation.

concept

The international monetary system is the general name of the principles, measures and organizational forms established by governments to meet the needs of international trade and international payment.

Specific content:

1, which determines the exchange rate system of the world and national currencies.

2. Determine the coordination mechanism of international monetary and financial affairs or establish relevant coordination and supervision institutions.

3. Determine the financing mechanism.

4. Determine the dominant currency or international reserve currency.

5. Determine the balance of payments and performance constraint mechanism of the international currency issuing countries.

Objectives and functions

Objective: To ensure the stable and orderly development of national trade and the world economy, and to effectively develop and utilize the resources of various countries.

Function: establish exchange rate mechanism to prevent vicious devaluation of circulation; Provide favorable means and solutions for adjusting the imbalance of international payments; Promote economic policy coordination among countries.

The first international monetary system in history was implemented from the19th century to the First World War.

Main contents: (1) Gold is the foundation of the international monetary system, which can be freely imported and exported to China, and is an international reserve asset and settlement currency; (2) Gold coins can be freely circulated and stored, and can also be freely cast according to the legal gold content. All kinds of gold coins or paper money can be freely converted into gold.

Advantages: It is a relatively stable monetary system, which is manifested in the relatively stable exchange rates among currency, gold and other coins representing the circulation of gold and bank notes, and the relatively stable price levels in various countries. Therefore, it has played a positive role in exchange rate stability, international trade, international capital flow and economic development.

Disadvantages and disintegration of the system: the monetary system is too dependent on gold, and the growth of gold production in reality is far from meeting the demand for gold in the world economic and trade growth. In short, gold is not enough. Coupled with the huge gap in economic strength among countries, the distribution of gold reserves is extremely uneven. Therefore, the issuance of bank notes is increasing, and the exchange of gold is becoming more and more difficult. When World War I broke out, countries stopped exporting gold, stopped the free exchange of bank notes and gold, and the international gold standard disintegrated.