Familiar Drawing Techniques

Summary of Familiar Drawing Techniques

process within the international monetary FUND (read this and related legal terms for further details) whereby a member nation suffering balance of payments problems may obtain foreign currencies from the IMF in exchange for its own. Basically, a nation will move first into a gold tranche position, i.e., will borrow foreign currencies up to the value of gold it has on deposit with the IMF, using the gold as collateral for the drawing. Should drawings be required beyond the value of its gold deposits, it will go into a credit tranche, or loan, supported by deposits of its own currency with the IMF.

(Main Author: William J. Miller)