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1998 Annual Report
Asking the Right Questions
About the IMF
General obligations of members
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:
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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;
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seek to promote stability by fostering orderly underlying economic
and financial conditions and a monetary system that does not tend
to produce erratic disruptions;
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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
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follow exchange policies compatible with the undertakings under
this Section.
Article IV: Extract from Section 3. Surveillance over exchange arrangements
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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.
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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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