Final answer:
The IMF promotes exchange rate stability to facilitate international trade, reduce risk and uncertainty in the economy, and ensure macroeconomic stability.
Step-by-step explanation:
Promoting exchange rate stability is a function of the IMF.
The IMF's original role was to maintain the parity between the US dollar and other currencies while eliminating currency exchange restrictions, facilitating the expansion of international trade.
This was called the Bretton Woods System. The IMF's goal was to promote stable exchange rates to facilitate international trade, reduce risk and uncertainty in the economy, and ensure macroeconomic stability.
By providing financial assistance and advice to countries facing balance of payments problems, currency devaluation, or macroeconomic instability, the IMF aims to promote economic stability.
Its programs, such as the Washington Consensus, focus on promoting fiscal balance, sound macroeconomic indicators, increased participation in international trade, and ultimately, growth and development.