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With reference to the Foreign exchange reserves, consider the following statements:
1. Forex reserves are assets such as foreign currencies, gold reserves, treasury bills, etc retained by a central bank or other monetary authority.
2. SEBI is the custodian of the Foreign exchange reserves in India.
Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
With reference to the Foreign exchange reserves, consider the followin...
Foreign exchange reserves fell by $7. 5 billion to $572 billion during the week ended July 15, according to data released by the RBI.
Foreign exchange reserves (Forex Reserve)
- Foreign Exchange reserves or Forex reserves are assets such as foreign currencies, gold reserves, treasury bills, etc retained by a central bank or other monetary authority.
- RBI is the custodian of the Foreign exchange reserves in India.
- It checks the balance payments and influences the foreign exchange rate of its currency and maintains stability in financial markets.
Hence only statement 1 is correct.
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Community Answer
With reference to the Foreign exchange reserves, consider the followin...
Foreign Exchange Reserves:
Foreign exchange reserves refer to the assets held by a central bank or other monetary authority in foreign currencies. These reserves are typically used to stabilize the domestic currency, support international trade, and maintain confidence in the financial system. The composition of forex reserves may include foreign currencies, gold reserves, special drawing rights (SDRs), and other financial assets such as treasury bills, government bonds, and deposits in foreign banks.
Statement 1: Forex reserves are assets such as foreign currencies, gold reserves, treasury bills, etc retained by a central bank or other monetary authority.
This statement is correct. Forex reserves consist of various assets held by a central bank or monetary authority. These assets are utilized to meet external payment obligations, manage exchange rate fluctuations, and maintain financial stability. The reserves are held in different forms to provide liquidity and flexibility to the central bank in managing the country's external economic position.
Statement 2: SEBI is the custodian of the Foreign exchange reserves in India.
This statement is incorrect. The Securities and Exchange Board of India (SEBI) is the regulatory authority for the securities market in India. It is responsible for regulating and supervising various market participants, such as stock exchanges, brokers, and mutual funds. However, the custodian of foreign exchange reserves in India is the Reserve Bank of India (RBI), which acts as the country's central bank.
Conclusion:
In conclusion, statement 1 is correct as forex reserves comprise assets like foreign currencies, gold reserves, treasury bills, etc. However, statement 2 is incorrect as SEBI is not the custodian of foreign exchange reserves in India. It is the Reserve Bank of India (RBI) that holds and manages these reserves.
Foreign exchange reserves refer to the assets held by a central bank or other monetary authority in foreign currencies. These reserves are typically used to stabilize the domestic currency, support international trade, and maintain confidence in the financial system. The composition of forex reserves may include foreign currencies, gold reserves, special drawing rights (SDRs), and other financial assets such as treasury bills, government bonds, and deposits in foreign banks.
Statement 1: Forex reserves are assets such as foreign currencies, gold reserves, treasury bills, etc retained by a central bank or other monetary authority.
This statement is correct. Forex reserves consist of various assets held by a central bank or monetary authority. These assets are utilized to meet external payment obligations, manage exchange rate fluctuations, and maintain financial stability. The reserves are held in different forms to provide liquidity and flexibility to the central bank in managing the country's external economic position.
Statement 2: SEBI is the custodian of the Foreign exchange reserves in India.
This statement is incorrect. The Securities and Exchange Board of India (SEBI) is the regulatory authority for the securities market in India. It is responsible for regulating and supervising various market participants, such as stock exchanges, brokers, and mutual funds. However, the custodian of foreign exchange reserves in India is the Reserve Bank of India (RBI), which acts as the country's central bank.
Conclusion:
In conclusion, statement 1 is correct as forex reserves comprise assets like foreign currencies, gold reserves, treasury bills, etc. However, statement 2 is incorrect as SEBI is not the custodian of foreign exchange reserves in India. It is the Reserve Bank of India (RBI) that holds and manages these reserves.
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With reference to the Foreign exchange reserves, consider the following statements:1. Forex reserves are assets such as foreign currencies, gold reserves, treasury bills, etc retained by a central bank or other monetary authority.2. SEBI is the custodian of the Foreign exchange reserves in India.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?
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