Annual Reports

Asking the Right Questions About the IMF: General obligations of members

Published January 1, 1999

Article IV of the Articles of Agreement spells out the obligations of members, authorizes the Fund to maintain a watch to ensure that countries are following responsible policies and empowers the Fund to require members to consult with it on their policies.

Article IV: Extract from Section 1. General obligations of members
In particular, each member shall:

  1. endeavor to direct its economic and financial policies toward the objective of fostering orderly economic growth with reasonable price stability, with due regard to its circumstances;

  2. seek to promote stability by fostering orderly underlying economic and financial conditions and a monetary system that does not tend to produce erratic disruptions;

  3. avoid manipulating exchange rates or the international monetary system in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage over other members; and

  4. follow exchange policies compatible with the undertakings under this Section.

Article IV: Extract from Section 3. Surveillance over exchange arrangements

  1. The Fund shall oversee the international monetary system in order to ensure its effective operation, and shall oversee the compliance of each member with its obligations under Section 1 of this Article.

  2. In order to fulfill its functions under (a) above, the Fund shall exercise firm surveillance over the exchange rate policies of members, and shall adopt specific principles for the guidance of all members with respect to those policies. Each member shall provide the Fund with the information necessary for such surveillance, and, when requested by the Fund, shall consult with it on the member's exchange rate policies.

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