Civil Services Prep

Prelims 2020 · Economy · Question 27

"Gold Tranche" (Reserve Tranche) refers to

  1. a loan system of the World Bank
  2. one of the operations of a Central Bank
  3. a credit system granted by WTO to its members
  4. a credit system granted by IMF to its members

Answer

a credit system granted by IMF to its members

  • (a) World Bank loan system — Incorrect. Gold Tranche/Reserve Tranche is not a World Bank lending window; it is linked to IMF member access to funds.
  • (b) Operation of a Central Bank — Incorrect. It is not a standard central bank monetary operation like OMO, CRR, or bank rate policy.
  • (c) Credit system granted by WTO — Incorrect. WTO deals with global trade rules, not member credit facilities.
  • (d) Credit system granted by IMF to its members — Correct. Gold Tranche (now called Reserve Tranche) refers to the portion of a member country's quota that it can draw from the IMF almost automatically.
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