Question

what is meant by ' Official Reserve Transaction ' ? Discuss their importance in Balance of Payments. ​

Answer 1

Answer: Official reserve transactions are the transactions made by the Central Bank which cause changes in its official reserves of foreign exchange. This happens only when an economy withdraws from its stock of foreign exchange reserves to finance deficit in its overall BOP.

Answer 2

Official reserve transactions are the transactions made by the central bank which cause changes into its official reserves of foreign exchange this happens when only an economy withdraws from its stock