Question

The Reserve Bank may, under Section 17, deal in foreign exchange and maintain which type of reserves?

Q: Answer-The Reserve Bank may, under Section 17, deal in foreign exchange and maintain which type of reserves...

Section 17 of the Reserve Bank of India Act enables the RBI to buy and sell foreign exchange and to maintain foreign exchange reserves. The management of the countrys foreign exchange reserves is an important RBI function, supporting exchange rate stability and external sector confidence. The RBI invests these reserves in safe and liquid foreign assets. This power complements the RBIs role under FEMA in managing the external value of the rupee.