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UPSC Prelims 2020 Paper-1 📅 04 Oct, 2020

"Gold Tranche" (Reserve Tranche) refers to

A
a loan system of the World Bank
B
one of the operations of a Central Bank
C
a credit system granted by WTO to its members
D
a credit system granted by IMF to its members
Result Summary
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APEDIA

UPSC Prelims
2020 • 04 Oct, 2020 • Paper-1
"Gold Tranche" (Reserve Tranche) refers to
Correct Answer
a credit system granted by IMF to its members
Definition of Reserve Tranche: The Reserve Tranche Position (RTP), historically associated with the term 'Gold Tranche', refers to a portion of the required quo......
Ref/Book : UPSC Prelims 2020
Ref. Subject Economy
Chapter -
Ref. Topic International Economics
Pg. No -
💡 Analysis & Explanation
Definition of Reserve Tranche ▼
The Reserve Tranche Position (RTP), historically associated with the term 'Gold Tranche', refers to a portion of the required quota of currency that each member country must provide to the International Monetary Fund (IMF).
Mechanism of Usage ▼
It acts as an emergency, no-questions-asked credit facility. Member nations can access this tranche of their own funds contributed to the IMF without facing service fees or strict macroeconomic conditionality.
Distinction from other Institutions ▼
The World Bank deals with long-term developmental loans, and the WTO focuses on trade regulations, not currency reserves or balance of payment credit systems.
Conclusion ▼
Therefore, it is specifically a credit arrangement managed by the International Monetary Fund.
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