RBI Functions – Custodian of Foreign Exchange

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26. The Reserve Bank of India (RBI) provides necessary liquidity support to the foreign exchange market to:

a) Ensure smooth functioning and efficient settlement of forex transactions

b) Stabilize the exchange rate and prevent speculative activities

c) Encourage foreign investment and capital inflows

d) All of the above

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27. The Reserve Bank of India (RBI) conducts periodic inspections and audits of authorized dealers and money changers to ensure compliance with:

a) Foreign exchange regulations and reporting requirements

b) Capital adequacy and risk management standards

c) Prevention of fraud and money laundering activities

d) All of the above

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28. The Reserve Bank of India (RBI) formulates and implements policies related to foreign exchange through the guidance and approval of:

a) The Ministry of Finance, Government of India

b) The International Monetary Fund (IMF)

c) The World Bank and other international financial institutions

d) All of the above

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29. The Reserve Bank of India (RBI) ensures the smooth functioning of the foreign exchange market by:

a) Licensing and regulating foreign exchange brokers and intermediaries

b) Providing a centralized electronic trading platform for forex transactions

c) Offering liquidity support and conducting open market operations

d) All of the above

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30. The Reserve Bank of India (RBI) aims to maintain an appropriate level of foreign exchange reserves by considering factors such as:

a) Import cover and capital account convertibility

b) External debt sustainability and credit rating

c) Foreign currency liquidity and market conditions

d) All of the above

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