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

1. Foreign-currency assets, Special Drawing Rights (SDRs) and loans from foreign countries
2. Foreign-currency assets, gold holdings of the RBI and SDRs
3. Foreign-currency assets, loans from the World Bank and SDRs
4. Foreign-currency assets, gold holdings of the RBI and loans from the World Bank

Explanation

Option (b) is correct

• India’s foreign exchange reserves refer to assets held by the Reserve Bank of India (RBI) in foreign currencies. These reserves act as a cushion and provide liquidity, ensuring our country can meet its external obligations. The Indian forex reserves consist of foreign currency assets, gold, special drawing rights, and the International Monetary Fund (IMF) reserve position.

Answer: (b) Foreign-currency assets, gold holdings of the RBI and SDRs; Difficulty Level: Easy