Which one of the following groups of items is included in India rsquo s foreign exchange reserves ........

Economic Affairs Balance of Payments

Which one of the following groups of items is included in India’s foreign-exchange reserves?

Foreign-currency assets, Special Drawing Rights (SDRs) and loans from foreign countries

Foreign-currency assets, gold holdings of the RBI and SDRs.

Foreign-currency assets, loans from the World Bank and SDRs

Foreign-currency assets, gold holdings of the RBI and loans from the World Bank

- Foreign-exchange reserves refer to a country's external assets held by its central bank, used to back liabilities and influence monetary policy.

- Correct Answer: Option 2 – India's foreign-exchange reserves typically include:

- Foreign-currency assets: Major component, mainly in US dollars and other global currencies.

- Gold holdings of the RBI: A significant part of reserves, providing a hedge against inflation.

- Special Drawing Rights (SDRs): International reserve asset created by the IMF, and adds to the liquidity.

- Option 1: Incorrect because loans from foreign countries are not part of reserves.

- Option 3: Incorrect as loans from the World Bank are not included.

- Option 4: Incorrect due to inclusion of World Bank loans instead of SDRs.

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