Question

    Which of the following components of the Forex Reserves

    of India forms the smallest part in terms of value ?
    A Gold Correct Answer Incorrect Answer
    B Foreign Currency Assets Correct Answer Incorrect Answer
    C Special Drawing Rights Correct Answer Incorrect Answer
    D Reserve Tranche Position Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    The Balance of payment is the sum of the current and capital account balance. The balance is added to the foreign exchange reserve if the balance of payment is in surplus. The balance is deducted if the balance of payment is in deficit. Foreign Exchange Reserve of a Country = Foreign Currency Assets + Gold + SDR + Reserve Tranche Position (RTP).

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