Quiz on Foreign Exchange Management and Reserves

Which section of the Foreign Exchange Management Act, 1999, empowers the Reserve Bank to authorize entities as Authorised Persons?

• Section 9
• Section 10
• Section 11
• Section 12

How does FEMA classify foreign exchange transactions?

• Revenue and non-revenue transactions
• Current Account and Capital Account Transactions
• Domestic and international transactions
• Import and export transactions

What are the components of foreign exchange reserves in India?

• Foreign Currency Assets (FCA) and Gold
• Foreign Currency Assets (FCA), Special Drawing Rights (SDRs), Reserve Tranche Position (RTP), and Gold
• Foreign Currency Assets (FCA) and Special Drawing Rights (SDRs)
• Special Drawing Rights (SDRs) and Reserve Tranche Position (RTP)

Which department handles the Reserve Management function of the Reserve Bank of India?

• Financial Markets Operation Department
• Foreign Exchange Department
• Department of External Investments and Operations
• Financial Markets Operation Department in consultation with Foreign Exchange Department.

What are the three schedules appended to the Current Account Transaction Rules, 2000?

• Schedule IA, Schedule IB, Schedule IC
• Schedule I, Schedule II, Schedule III
• Schedule A, Schedule B, Schedule C
• Schedule X, Schedule Y, Schedule Z

What are the risks attendant on deployment of reserves?

• Liquidity risk
• Credit risk
• Market risk
• All of the above

Who manages the foreign exchange reserves in India?

• Departmet of Economic Affairs, Ministry of Finance
• Securities and Exchange Board of India
• Reserve Bank of India
• Public Debt Management Cell

What is the maximum residual maturity of the debt instruments in which the forex reserves are invested?

• 10 years
• 15 years
• 20 years
• 5 years

Where are gains/losses on valuation of FCA and gold due to movements in exchange rates and/or price of gold booked?

• Investment Revaluation Account (IRA)
• Balance sheet
• Currency and Gold Revaluation Account (CGRA)
• Foreign dated securities

When was the Foreign Exchange Management Act came into force?

• June 1, 2000
• July 1, 2000
• July 31, 2000
• June 30, 2000