The International Monetary Fund is definitely not focusing on the foreign assets accumulation of different countries without a reason, as the staff report of the same rejected the recent criticism done by an internal auditor of the organization. The staff report stated that the report was not able to properly misconstrue the basic motives of the organization. The staff report also stated that the International Monetary Fund has always been more focused on getting to the roots of the problems and finding a solution to the same, rather than analyzing the causes only. It also mentioned that IMF will still not support countries which feel unlimited reserves can be accumulated. Allowing so, IMF fear can have adverse effects on other economies and therefore, the entire global economy will end up suffering.
The audit was completed by the Independent Evaluation Office and the report was made public today. It stated that the International Monetary Fund has kind of overemphasized on the risk of different countries which are amassing the reserve assets. The audit report along with the staff comment was released today. In addition, the boards’ decision of creating divisions between the executive directors was also revealed through the same.
Many economists believe that this audit report will encourage countries such as China or South Korea, which are known to have the largest stockpile of reserves in the world. According to the last report released on 30th September the total reserve for these countries pile up to $3.29 trillion. US authorities have alleged many times that these countries keep the major currency weak in an attempt to promote the export business. However, these countries have continuously stated that such huge reserves will help them to survive in times of global crisis such as the one experienced in 2008. The audit report, incidentally, published that many member countries of IMF believe that the organization’s recent moves against foreign assets accumulation may have been impacted by several developed countries which are members of IMF as well.
A separate statement was released by Christine Lagarde, the Managing Director of IMF. Lagarde stated that the report made a mistake in identifying the rationale of the fund. However, Christine added that many of the recommendations made in the report are definitely congruent and can help IMF to come up with better set of future policies.