International Monetary Fund and World Bank. The IMF's purpose is to facilitate international
trade, allowing nations to borrow to stabilize their balance of trade payments.How ever, when economically weak nations incur chronic balance of trade trade deficits and perhaps face deferral or default on international debts, the IMF may condition its loans on changes in a nation's economic policies. It may require a reduction in a nation's government deficits by reduced public spending and/or higher taxes, or require a devaluation of its currency making its exports cheaper and imports more expensive. It may also require the adoption of noninflationary monetary policies. Currently, the IMF as well as the World Bank are actively involved in assisting Russia and other states of the former Soviet Union to convert to free
market economies.
The World Bank makes long-term loan-s, mostly to developing nations, to assist in economic
development.It works closely with the IMF in investigating the economic conditions of nations applying for loans and generally imposes IMF requirements on these nations as conditions for loans.