As custodian of foreign exchange reserves, the RBI

prints foreign currency notesCorrect answerYour answerholds the country's foreign currency and gold reserves and can use them to steady the rupeeCorrect answerYour answerdecides the country's import dutiesCorrect answerYour answerlends to foreign governments for their budgetsCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer B

Correct answer: B

The RBI manages the reserves and may buy or sell dollars to calm sharp swings in the exchange rate.

Concept: Custodian of forex reserves
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsFunctions of the central bank

Practise this chapter →

Ten questions from The Central Bank & Monetary Policy, at your own pace.

Practise this chapter →

Ten questions from The Central Bank & Monetary Policy, at your own pace.

Practise this chapter All 58 questions in The Central Bank & Monetary Policy Revise the notes for The Central Bank & Monetary Policy

As custodian of foreign exchange reserves, the RBI

Explanation