UPSC Prelims 2022 · GS Paper I

Question 1: Economy and Social Development

“Rapid Financing Instrument” and “Rapid Credit Facility” are related to the provisions of lending by which one of the following ?

aAsian Development Bank

bInternational Monetary Fund

cUnited Nations Environment Programme Finance Initiative

dWorld Bank

AnswerUPSC’s answer is (b).

The Rapid Financing Instrument (RFI) and Rapid Credit Facility (RCF) are the IMF's emergency financing windows. They give quick money with light conditionality to members facing an urgent balance-of-payments need from a natural disaster, pandemic or sudden shock, without a full programme. RCF is concessional and meant for low-income countries; RFI is open to all members. Remember them as an IMF pair.

Why each option is right or wrong

(a) ADB lends through its own ordinary and concessional windows, not through RFI or RCF.
(b) Correct. Both are IMF emergency facilities for urgent balance-of-payments needs.
(c) UNEP FI is a partnership with the financial sector on sustainability; it does not lend.
(d) The World Bank lends through IBRD loans and IDA credits; it has no RFI or RCF.

Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.

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Source: UPSC, Civil Services (Preliminary) Examination 2022, General Studies Paper I, Series A. The paper on upsc.gov.in.