The correct option is (c).
Explanation
The International Monetary and Financial Committee (IMFC) serves as the primary advisory body to the Board of Governors of the International Monetary Fund (IMF). It provides strategic direction and political guidance to the IMF.
Statement-wise Analysis:
- Statement 1 is Correct: The mandate of the IMFC is to advise and report to the IMF Board of Governors on the supervision and management of the international monetary and financial system. This includes discussing matters of concern affecting the global economy and advising the IMF on the direction of its work and policies.
- Statement 2 is Correct: A number of international institutions participate as observers in the IMFC's meetings to facilitate global economic coordination. The World Bank participates as an observer, reflecting the close relationship between the two Bretton Woods institutions. Other observers include the World Trade Organization (WTO), the Financial Stability Board (FSB), and the Organisation for Economic Co-operation and Development (OECD).
Key Takeaway: The IMFC is an advisory committee composed of 24 members (usually finance ministers or central bank governors) that guides the IMF's work, and the World Bank attends its meetings as an observer.