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.