"Gold Tranche" (Reserve Tranche) refers to
- Aa loan system of the World Bank
- Bone of the operations of a Central Bank
- Ca credit system granted by WTO to its members
- Da credit system granted by IMF to its membersCorrect
Explanation
The term "Gold Tranche" or "Reserve Tranche" refers to a component of a member country's quota within the International Monetary Fund (IMF).
When a country joins the IMF, it is assigned a quota, which largely determines its financial contribution to the IMF, its voting power, and its access to IMF financing. A portion of this quota is contributed in reserve assets (like Special Drawing Rights - SDRs, or formerly, gold). This portion is known as the reserve tranche.
Key characteristics of the reserve tranche:
It represents a country's own reserves held by the IMF. A member country can draw upon its reserve tranche position at any time without any conditions or obligations to implement economic policy reforms. It is effectively an unconditional line of credit or a readily available portion of its own international reserves. It is distinct from other IMF lending facilities, which often come with policy conditions. Therefore, the correct answer is that it refers to a credit system granted by the IMF to its members, allowing unconditional access to a portion of their quota.
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