THE IMF IN HISTORY
1940s / Out of the Ashes
As World War II draws to a close, Allied leaders draft plans for a postwar economic order.
Bretton Woods Conference
Representatives of 44 Allied nations, seeking to avoid the mistakes that led to Depression and World War II, meet to plan a new economic order built on global cooperation. They set up a system of exchange rates linked to the dollar to be supervised by the IMF, and they give the Fund three critical missions: promoting international monetary cooperation, supporting the expansion of trade and economic growth, and discouraging policies that would harm prosperity.
IMF begins operations
Membership starts at 40 and grows to 189 by 2016, with the entry of Nauru.
MAY 8, 1945
Germany surrenders to Allied forces, ending war in Europe.
1950s / Cold War
Communist nations, dominated by the Soviet Union and China, withdraw from the global economic system.
Soviet Union begins blockade of West Berlin, which is to last until May 12, 1949, in first major Cold War confrontation.
Poland withdraws from IMF
Eastern bloc nation acts under pressure from USSR as Cold War intensifies. Poland will be readmitted in 1986.
Conflict over Suez Canal, involving Egypt, France, Israel, and the United Kingdom, touches off international political crisis with major economic repercussions.
First big loans
Suez Crisis is an early test of IMF’s crisis management role and leads to first large burst of lending by IMF to the four countries involved.
1960s / Decolonization of Africa
Under pressure from independence movements, France, United Kingdom, and other European powers give up their colonies.
IMF creates Africa Department
Only three of the IMF’s earliest members were in Africa: Egypt, Ethiopia, and South Africa. By end of 1969, another 34 have joined.
1970s / Vietnam War and Oil Shocks
US spending on Vietnam War and domestic social programs leads to inflation and overvaluation of dollar.
Gold convertibility ends
US President Richard Nixon suspends convertibility of dollar into gold, ending system of fixed exchange rates created at Bretton Woods.
OPEC oil embargo
In wake of Arab-Israeli war, OPEC members announce embargo against United States, Canada, Japan, United Kingdom, and Netherlands, leading to surge in global oil prices. IMF creates new tools to help countries facing an energy emergency, in line with the Fund’s role to help smooth shocks and prevent harmful spillovers.
Flexible exchange rates
IMF acknowledges right of members to adopt exchange-rate arrangements of their choice.
1980s / International Debt Crisis
Banks use “petrodollars”—profits of oil-producing countries—to increase lending to developing nations.
Renunciation of foreign debt marks beginning of debt crisis across Latin America. IMF takes on role of international crisis manager.
Help for low-income nations
IMF establishes facility to lend to low-income developing countries at below-market rates.
1990s / Collapse of Communism, Debt Relief
Formerly communist nations join the global economy, and capital starts to flow more freely across borders.
Fall of Berlin Wall
Collapse of communism in Europe ends postwar division of the continent.
Soviet Union dissolved
Twenty formerly communist nations soon join the IMF, the biggest expansion of its membership since the 1960s. Fund plays a central role in helping them manage transition from centrally planned to market-driven economies with policy advice, technical assistance, and financial support.
Mexico devalues peso against dollar, prompting investors to withdraw funding. IMF participates in $50 billion program to stabilize Mexico’s economy. It also provides financial assistance to Russia, Brazil, and other emerging markets.
IMF and World Bank launch Initiative for Heavily Indebted Poor Countries to ensure that no low-income country bears a debt burden it cannot manage. Debt relief for 36 countries comes to almost $77 billion by 2017.
Asian financial crisis
Thailand devalues baht, marking beginning of Asian crisis.
IMF announces $17 billion program for Thailand, followed by packages of $23 billion for Indonesia and $57 billion for South Korea.
Crisis in Russia
Asian crisis spreads to Russia, already hobbled by severe budget deficits, causing plunge in Russian stocks, bonds, and ruble. IMF and international lenders provide $22.6 billion to help stabilize country’s economy.
IMF and World Bank, drawing on experience of Asian crisis, create Financial Sector Assessment Program to gauge resilience of members’ financial systems.
Euro is initially used as unit of account to replace European currency unit, or ECU. Euro notes and coins begin to circulate January 1, 2002. European Central Bank granted observer status at IMF.
2000s / Debt Forgiveness, Global Financial Crisis
IMF and World Bank announce that 22 countries, including 18 in Africa, qualify for debt relief.
China joins WTO
Entry into World Trade Organization marks China’s integration into global economy.
Lehman Brothers declares bankruptcy
Collapse of US investment bank marks beginning of global financial crisis. In following decade, IMF provides financing of about $500 billion to 90 countries and injects $250 billion into global financial system, helping avert another Great Depression and enabling recovery of global economy.
G20 Washington summit
Leaders of Group of 20 major advanced and emerging market economies lay foundation for reforms to strengthen global financial system. In years that follow, IMF works with standard-setting bodies to improve surveillance and strengthen supervision and regulation of financial firms. G20 nations agree to undergo mandatory financial sector assessments by IMF.
2010s / A Halting Recovery
As advanced economies struggle to recover, turmoil sweeps Middle East.
IMF board approves far-reaching changes that give greater say in decisions to China, India, Mexico, Brazil, and other emerging market economies.
European sovereign debt crisis
Soaring budget deficits sow doubt about ability of several European countries to repay debts. Government bailouts of ailing banks add to pressure, temporarily shaking investor confidence in viability of euro. IMF joins European Central Bank and European Commission in providing emergency loans to Cyprus, Greece, Ireland, and Portugal.
Unrest and civil conflict sweep across Middle East, removing rulers in Egypt, Libya, and Yemen. IMF provides $37 billion in loans to stabilize and reform region’s economies and technical assistance on taxation, monetary policy, and public finances, among other areas.
IMF is one of first international financial institutions to respond, delivering $130 million to three countries in September 2014, and another $160 million in February 2015.
Renminbi joins currency basket
Chinese currency added to IMF’s currency basket alongside dollar, euro, pound, and yen in sign of China’s growing importance in global economy.
IMF approves $50 billion loan, later increased to $57 billion, to help Argentina’s economy in the face of destabilizing market conditions.
2020s / A Crisis Like No Other
The COVID-19 pandemic creates the worst recession since the Great Depression.