Credit Tranches
Credit Tranches : The credit tranche policy is the International Monetary Fund's (IMF) basic policy on the use of its general resources Credit is made available in four tranches, each equivalent to 25 percent of a member's quota A first credit tranche purchase raises the IMF's holdings of the purchasing member's currency to no more than 25 percent of quota Generally, a member may reuest use of the IMF's resources in the first credit tranche if it demonstrates that it is making reasonable efforts to overcome its balance of payments difficulties Also, a member may request use of the first credit tranche as part of a stand-by arrangement Subsequent purchases are made in the upper credit tranches These resources are made available if a member adopts policies that provide appropriate grounds for expecting that the member's balance of payments difficulties will be resolved within a reasonable period Use of these resources is almost always made under a stand-by or an extended arrangement See: International Monetary Fund
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