Here are some MCQs on RBI Functions – Custodian of Foreign Exchange
1. Which of the following is not a function of the Reserve Bank of India (RBI) as the custodian of foreign exchange?
a) Issuing and managing foreign currency reserves
b) Regulating foreign exchange transactions
c) Encouraging foreign investment in the country
d) Administering fiscal policy
2. The Reserve Bank of India (RBI) is responsible for managing and maintaining the country’s foreign exchange reserves to ensure:
a) Economic stability and financial market development
b) Currency devaluation and export promotion
c) Reduction in inflation rates
d) Expansionary monetary policy
3. Which department of the Reserve Bank of India (RBI) is primarily responsible for managing foreign exchange reserves?
a) Foreign Exchange Department
b) Monetary Policy Department
c) Banking Regulation Department
d) Internal Debt Management Department
4. The Reserve Bank of India (RBI) acts as a custodian of foreign exchange by:
a) Dealing with foreign exchange transactions on behalf of the government and other authorized entities
b) Ensuring the stability of the domestic currency in the foreign exchange market
c) Monitoring and regulating foreign currency flows and exchange rates
d) All of the above
5. Under the provisions of the Foreign Exchange Management Act (FEMA), the Reserve Bank of India (RBI) has the authority to regulate:
a) Import and export of goods and services
b) Foreign direct investments (FDIs) in the country
c) Remittances and outward investments by residents
d) All of the above
