Composition of FOREX

Q.  Which of the following is/are not included in FOREX?

1. Foreign currency assets held by the RBI
2. Gold holdings of the RBI
3. SDRs
4. Reserve Position in the IMF

- Published on 22 Dec 15

a. 1,2,3
b. 2,3,4
c. 1,3,4
d. None

ANSWER: None
 
- China has the largest forex reserves.
- The level of forex reserve is expressed in US dollars. Hence India’s forex reserve declines when US dollar appreciates against major international currencies and vice versa.
- FOREX can be gained through buying, getting funds from IMF or world bank etc. or interest and aid received by India.

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