Here are some MCQs on Forex Reserves of India and Forex Management
1. What are Forex Reserves?
a. Foreign loans taken by a country
b. Foreign investments made by a country
c. Foreign currencies held by a country
d. Foreign trade balance of a country
2. Which institution manages India’s Forex Reserves?
a. Reserve Bank of India (RBI)
b. Ministry of Finance
c. Securities and Exchange Board of India (SEBI)
d. Ministry of Commerce and Industry
3. Which of the following is NOT a component of India’s Forex Reserves?
a. Foreign currency assets
b. Gold holdings
c. Special Drawing Rights (SDRs)
d. Government securities
4. What is the purpose of maintaining Forex Reserves?
a. To stabilize the value of the domestic currency
b. To finance imports and external debt
c. To fund government expenditure
d. To promote foreign direct investment
5. Which of the following factors can contribute to an increase in Forex Reserves?
a. Trade deficit
b. Capital outflows
c. Foreign direct investment
d. Depreciation of the domestic currency
