reserve tranche


Also found in: Financial.
Related to reserve tranche: SDR

reserve tranche

n
(Banking & Finance) the quota of 25 per cent to which a member of the IMF has unconditional access. Prior to 1978 it was paid in gold and known as the gold tranche
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The foreign assets exclude CBUAE Reserve Tranche Position and Special Drawing Rights holdings with the International Monetary Fund.
The significant rise in current account surplus and decline in the trade balance deficit resulted in a balance of payment surplus of AED36.3 billion, comprising 2.6 per cent of GDP, meaning net foreign assets held by the CBUAE increased during the same period by AED36.3 billion, inclusive CBUAE's Reserve Tranche Position (RTP) and Special Drawing Rights holdings with the International Monetary Fund, WAM said.
The foreign assets exclude Central Bank's Reserve Tranche Position and Special Drawing Rights holdings with the International Monetary Fund.
Summary of IMF members' quota, reserve tranche position, SDR holdings, outstanding credit, recent lending arrangements, projected payments due to the IMF, and historical transactions with the IMF.
In exchange for the use of the IMF's holdings of members' currency in loan transfers, the member-country acquires an equivalent increase in SDR in its reserve tranche position but there is no charge in the gross international reserves level.
The low reserve tranche, which includes net transaction accounts over $12.4 million and up to $79.5 million, will be subject to a 3 percent reserve ratio.
The Federal Reserve Board announced on October 4, 2005, the annual indexing of the low reserve tranche and of the reserve requirement exemption amount for 2006.
Reserve Tranche Policies: A member country is in Reserve position when its quota exceeds the IMF holdings of its currency excluding credits extended to it.
The second principle is that a member of the Fund can use its reserves to meet a capital outflow but win not be allowed to use the Fund's general resources to meet a large or sustained outflow, with the exception of reserve tranche purchases.(14) Reserve tranche purchases correspond to the member's contribution in reserve assets to the Fund's capital.
The SDR interest rate provides the basis for calculating the interest charged to members on nonconcessional IMF loans from the IMF s general resources, the interest paid to IMF members on their remunerated creditor positions in the IMF (reserve tranche positions and claims under borrowing agreements), and the interest paid to members on their SDR holdings and charged on their SDR allocation.
The Federal Reserve Board on October 6, 2004, announced the annual indexing of the low reserve tranche and of the reserve requirement exemption amount for 2005.