At its meeting in Istanbul, Turkey, the International Monetary Fund has been working on its evolving role, in the wake of the near global financial meltdown.
The IMF has been given the job of overseeing the world’s economy to avoid risky imbalances in areas such as trade. It has indicated it needs greater powers and more money to anticipate and handle any future economic crisis. As for the recovery, IMF chief Dominique Strauss-Kahn said: “The IMF projection is of global growth for 2010 of around three percent. It is not that big, but it is a good beginning. But looking ahead, the post crisis world will be, and must be, very different from the one we had before the crisis, and that’s why we need to adapt to that reality.” The IMF’s resources need to be boosted so it can be the lender of last resort for the world economy. IMF members have promised 500 billion dollars, with 125 billion euros coming from the EU. China, which has led the nascent economic rebound, is central to recovery. But at the IMF meeting, the Chinese Finance Minister Xie Xuren warned that it has not yet seen its own recovery take root and will continue its massive economic stimulus for now. China also said the Fund needs to fix “intrinsic defects” in the world’s monetary system. China, which has invested the vast bulk of its two trillion dollar reserves in US dollar assets, called for the IMF to stabilise the exchange rates of major reserve currencies, although it did not directly mention the dollar.