Reserve Tranche Position and SDR
Reserve Tranche Position:
The primary means of financing the International Monetary fund (IMF) is through members’ quotas. Each member of the IMF is assigned a quota, part of which is payable in SDRs or specified usable currencies and part in the members own currency.
The difference between a member’s quota and the IMFs holdings of its currency is a Country’s Reserve Trance Position. It is accounted among a country’s FOREX.
The SDR or Supplementary Drawing Rights is an international reserve asset created by the IMF. Its value is defined in terms of a basket of the US Dollar, the Euro, the Yen and the Sterling. Interest payments and receipts are made in SDRs.