Current Affairs · International Economy
The International Bank for Reconstruction and Development (IBRD) provides sovereign loans to member countries like India to support development projects. In the context of a sovereign loan agreement between the Government of India and the IBRD for a green energy transition project, which of the following statements most accurately reflects the nature of the guarantee and currency risk?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1The interest rate on IBRD sovereign loans is fixed at the time of the first disbursement and cannot be linked to floating market benchmarks like SOFR.
- 2IBRD sovereign loans are considered non-recourse debt, meaning the lender can only claim against the specific assets of the project in case of default.
- 3The loan is a direct obligation of the sovereign state, and the currency of repayment is typically the currency in which the loan was disbursed unless a currency conversion option is exercised.✓
- 4The loan is guaranteed by the Reserve Bank of India and must be repaid exclusively in Indian Rupees regardless of the disbursement currency.
Correct answer
The loan is a direct obligation of the sovereign state, and the currency of repayment is typically the currency in which the loan was disbursed unless a currency conversion option is exercised.
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Current Affairs?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice International Economy MCQs →Want more practice questions on International Economy?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Current Affairs · International Economy