UGC NET COMMERCE November 2017(Paper-II) Q46
- Option : A
- Explanation : The Extended Fund Facility (EFF) was established in 1974 to allow developing countries to borrow beyond their quotas over longer periods than are allowed under ordinary drawing rights. The EFF arrangement gives members assistance for up to 3 years, with repayment provisions extending over a range of 4–10 years. Drawings under the EFF may be more than 100 per cent of a country’s quota over a 3-year period, but the conditions are stringent. The country must provide a detailed statement of policies and measures every 12 months. The resources are provided in instalments, with performance criteria attached. Nonetheless the facility represented an important and significant shift in emphasis from viewing the balance of payments as a stabilization problem, to recognizing the balance of payments as a fundamental longterm constraint on growth that cannot be rectified in a short period of time, if ever.
