world_organizations hard MCQ

Which IMF facility provides precautionary credit lines to countries with strong economic fundamentals and policy track records, allowing them to access funds quickly if needed to address potential balance of payments pressures without immediate drawing?

  1. Stand-By Arrangement
  2. Flexible Credit Line (FCL)
  3. Precautionary and Liquidity Line (PLL)
  4. Both B and C

Answer: Both B and C

The FCL (for very strong performers) and PLL (for countries with sound but not exceptional fundamentals) offer upfront qualification and flexible access. These instruments provide insurance against external shocks, bolster market confidence, and reduce the need for costly precautionary reserves.

Topic International Monetary Fund
Exam Relevance Banking, UPSC, SSC
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