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Question
Central bank is the ______ of the country's foreign currency reserves.
Options
Dealer
Consumer
Custodian
User
Solution
Central bank is the Custodian of the country's foreign currency reserves.
Explanation:
The central bank handles crises related to an unfavourable balance of payments positions and serves as the only consumer of foreign exchange reserves.
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RELATED QUESTIONS
Assertion (A): Central bank as a banker to the government, works as a custodian of foreign exchange reserves.
Reason (R): The Central bank acts as a Clearing house for the transfer and settlement of mutual claims of commercial banks.
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- All currency notes (except one rupee note) bear the signature of Governor, RBI.
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Developmental functions.
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