Solution:• The International Monetary Fund (IMF) is funded through its members and their quota contributions.
• The “Gold Tranche” (Reserve Tranche) is basically an emergency account that IMF members can access at any time without agreeing to conditions or paying a service fee. In other words, it is a portion of a member country’s quota that can be withdrawn free of charge at its own discretion. The size of the gold tranche of an IMF member country’s quota that is accessible without fees or economic reform conditions.
• Initially, member nations’ reserve tranches are 25% of their quota, but this position can change according to any lending that the IMF does with its holdings of the member’s currency.
• The reserve tranches that countries hold with the IMF are considered their facilities of first resort. It mean that the country will tap into them before seeking a formal credit tranche that charges interest.