"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
Show Answer
The correct answer is D.
A loan system of the World Bank
- This option is incorrect. The Gold Tranche or Reserve Tranche is not related to the loan systems provided by the World Bank.
One of the operations of a Central Bank
- This option is also incorrect. The Gold Tranche has nothing to do with the operations or functions of a country's Central Bank.
A credit system granted by WTO to its members
- This option is incorrect. The WTO does not provide any credit system called Gold Tranche to its members.
A credit system granted by IMF to its members
- This option is correct. As per the IMF, the Gold Tranche refers to financial resources or credit that the IMF provides to its members.
- As per IMF: "Each member of the Fund is assigned a quota that determines its financial commitment and voting power. A member pays its subscription to the Fund equal to its quota with 25 percent paid in Special Drawing Rights or currencies chosen by the member, and 75 percent paid in its own currency."
- "The Reserve Tranche is the foreign currency component of a member's quota, minus Fund holdings of the member's currency in excess of this Reserve Tranche component."
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