Question

Name the two services provided by India which generate maximum foreign exchange.​

Answer 1

QuestioN :

Name the two services provided by India which generate maximum foreign exchange.​

Answer :

The two services provided by India which generate maximum foreign exchange are :

• Foreign currency assets(FSA)

• Gold holding of RBI and Special Drawing Rights(SDR).

Foreign currency assets :-

[ Foreign Currency Assets (FCA) that is the most important component of the RBI's foreign exchange reserve are the assets like US Treasury Bills bought by the RBI using foreign currencies. ]

Special Drawing Rights :-

[ Special drawing rights (SDR) refer to an international type of monetary reserve currency created by the International Monetary Fund (IMF) in 1969 that operates as a supplement to the existing money reserves of member countries. ]

Answer 2

India's foreign exchange reserves are mainly composed of US dollar in the forms of US government bonds and institutional bonds. with nearly 6.6% of forex reserves in gold. The FCAs also include investments in US Treasury bonds, bonds of other selected governments and deposits with foreign central and commercial banks.