Reserve Tranche Position Explained

A country's Reserve Tranche Position (RTP) is the difference between the International Monetary Fund's (IMF) holdings of that country's currency and the country's IMF-designated quota.

Background

The primary means of financing the International Monetary Fund (IMF) is through members' quotas. Each member of the IMF is assigned a quota (membership fee), part of which is payable in special drawing rights (SDRs) or specified usable currencies ("reserve assets"), and part in the member's own currency. The difference between a member's quota and the IMF's holdings of its currency is a country's Reserve Tranche Position (RTP).[1] Reserve Tranche Position is accounted among a country's foreign-exchange reserves. Part of the quota can be withdrawn from the IMF without any interest during critical situations of a country such as Balance of Payment (BOP) crises. This part of the money which can be withdrawn without any interest is the RTP.

See also

Notes and References

  1. https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/14/51/Special-Drawing-Right-SDR International Monetary Fund (IMF) and Special Drawing Rights (SDRs)