Discussion

Ex. 10.

a) Read the text.

b) Describe the facilities under which resources are made available to the IMF members.

c) Explain the "conditionality" principle of the IMF.

The IMF's financial resources are made available to its members under a variety of facilities and policies, depending on the circumstances, especially the nature of the macroeconomic and structural problems to be addressed.

The IMF makes resources available under both its general resources and its concessional financing facilities. Member countries use the general resources of the IMF by making a purchase (drawing) of other members' currencies or SDRs with an equivalent amount of their own currencies. The IMF levies charges on these drawings and requires that members repurchase (repay) their own currencies from the IMF with other members' currencies or SDRs over a specified time. Concessional financing under the structural adjustment and enhanced structural adjustment facilities is made available in the form of loans.

Regular facilities include: Reserve tranche, Credit tranches, Stand-by Arrangements, Extended Fund Facility. In providing financial support to any member country, the IMF must be assured that the member is pursuing policies that will ameliorate or eliminate its external payments problem. The requirement that members make a commitment to a set of policy measures aimed at correcting economic and financial imbalances within a reasonable period in return for IMF financial support is known as "conditionality". "Conditionality" is designed to ensure that members using IMF resources will be able to repay the IMF in a timely manner.

IMF-supported programmes emphasize certain key aggregate economic variables, including domestic credit, the public sector deficit, international reserves, and external debt. They also emphasize crucial elements of the pricing system - including the exchange rate, interest rate, and, in some cases, commodity prices - that significantly affect the country's public finances and foreign trade.

A successful adjustment programme must elicit an adequate response from the supply side of the economy. Interest rates and exchange rates are particularly important, since they influence savings and investment decisions and, therefore, a member country's growth prospects.

Adjustment programmes, typically, have an impact on income distribution, employment and social services. While the promotion of sound macroeconomic policies and structural reforms contributes to sustained growth and employment, adjustment may also involve short-term social costs to vulnerable groups. The IMF staff analyse the implications of reform measures for vulnerable groups and advise the authorities on how best to integrate social safety nets and their financing into programmes.

Words you may need:

Англійський варіант	Російський варіант	Український варіант
address	обращаться	звертатися
regular facilities	обычные механизмы финансирования	звичайні механізми фінансування
reserve tranche	резервный транш	резервний транш
ameliorate	улучшать	поліпшувати
external payments problem	проблема внешних платежей	проблема зовнішніх платежів
"conditionality"	обусловленность кредитов	обумовленість кредитів
timely	своевременный	своєчасний
aggregate economic variables	совокупные экономические переменные	сукупні економічні змінні
crucial	решающий	вирішальний
elicit	извлекать, выявлять	виявляти
sound policy	разумная политика	розумна політика
implication	смысл, значение	сенс, значення

Ex. 11. Read the dialogue, sum up its content and act it out: