Question

Which of the following transactions are correct about ORT?

विकल्प

• The transactions carried by the monetary authority of a country, which cause changes in official reserves, are termed official reserve transactions (ORT) 

• These transactions are carried through purchase or sale of currency in the exchange market for foreign currencies or other assets.

• Both the transactions carried by the monetary authority of a country, which cause changes in official reserves, are termed official reserve transactions (ORT) and these transactions are carried through the purchase or sale of currency in the exchange market for foreign currencies or other assets.

• None of the above

Answer 1

The transactions carried by the monetary authority of a country, which cause changes in official reserves, are termed official reserve transactions (ORT)

Explanation:

Official reserve transactions are transactions carried out by a country's monetary authority that result in changes in official reserves (ORT). These transactions are carried out by purchasing or selling foreign currencies or other assets on the exchange market. During deficits, reserves are drawn by selling foreign currencies on the exchange market, and during surpluses, foreign currencies are purchased. The term "overall balance of payments surplus" or "overall balance of payments deficit" refers to the increase or decline in official reserves.