Practice Forex markets and Guidelines Questions and Answers

• Import cover is crucial for maintaining a stable currency and avoiding a balance of payments crisis. Which of the following ratio best reflects the import ...
• The primary function of the foreign exchange market in an open economy is to:​ 
• IMF describing India’s FX regime as “crawl-like” rather than purely floating implies ______​
• A SEBI-regulated entity performing cross-border transactions uses a BIC (Business Identifier Code), commonly known as a SWIFT Code. In an 8 or 11-characte...
• An Indian importer observes the following quotes in the interbank market: Direct Quote in India: 1 USD = ₹83.50 Indirect Quote in India: 100 INR = 1...
• A SEBI-registered Infrastructure Investment Trust (InvIT) plans to raise funds by issuing Masala Bonds in the London market. Which of the following regul...
• When a country devalues its currency to improve its trade balance, the J-Curve effect suggests that the trade deficit will initially worsen before it b...
• A company based in the United States is expecting to receive a payment of 10 million euros in next two months. The company is concerned about the fall in t...
• According to the Interest Rate Parity (IRP) theory, if the 1-year risk-free interest rate in India is 10% and the 1-year risk-free interest rate in the...
• The Marshall-Lerner Condition explains the requirement for a currency devaluation to successfully improve a country's trade balance in the long run. Acco...
• What minimum percentage of paid-up equity capital must an Indian resident invest in a listed foreign entity for it to be automatically classified as Overse...
• Under the general rules, what is the maximum aggregate financial commitment limit for an Indian entity across all foreign entities?
• Which of the following is NOT permitted as a mode of payment for an Indian resident making an Overseas Investment?
• If an Indian resident receives foreign securities from another resident relative who held them legally, what is the financial limit on this gift?
• Which of the following items is explicitly EXCLUDED from counting toward the 400% financial commitment limit of an Indian entity?
• Under OPI regulations, buying derivatives contracts (like futures and options) is:
• Which of the following is NOT a primary method through which an Indian entity can make or hold equity investments under the general manner of ODI?
• Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) are permitted to invest in certain instruments on a repatriation basis without any limit....
• Following recent regulatory changes, the standalone overall investment limit of ₹2,50,000 crore under the Voluntary Retention Route (VRR) has been remove...
• Whether a foreign investment in a listed Indian company is classified as FPI or FDI is primarily determined by which of the following criteria? 
• As per the Foreign Exchange Management Act (FEMA) guidelines, what is the standard timeframe within which the full export value of goods, software, or serv...
• To be eligible for the RBI swap facility, fresh or renewed FCNR(B) deposits must be mobilized for what minimum and maximum tenor, and in which currency is ...
• What is the mandatory lock-in period for the underlying FCNR(B) deposits under this scheme, and can the corresponding swap undertaken with the RBI be cance...