Question

Which of the following statements does not apply to the reserve tranche?

a. the member country repays the funds to the IMF by repurchasing its domestic currency reserves with foreign reserves

b. it is used when a member country experiences balance of payment difficulties

c. it is a portion of the member country quota

d. the member country borrows funds from the IMF by purchasing foreign reserves with its domestic currency

Answer 1

Answer. (a.) The member country repays the funds to the IMF by repurchasing its domestic currency reserves with foreign reserves statement does not apply to the reserve tranche.

Reason,

A hold tranche is a segment of the necessary standard of cash every part nation must give to the International Monetary Fund (IMF) that can be used for its own motivations—without a help charge or financial change conditions.

The IMF is subsidized through its individuals and their share commitments. The save tranche is essentially a crisis account that IMF individuals can access whenever without consenting to conditions or paying an assistance expense. At the end of the day, a part of a part nation's amount can be pulled back for nothing out of pocket at its own prudence.