Question

Identify, which of the following is not a source of demand for foreign exchange for Indian economy? 

Options

• Import of goods and services.

• Remittances by foreigners living in India to their families abroad.

• Indian tourists visiting foreign countries.

• Loans from Rest of the World (ROW).

Answer 1

Loans from Rest of the World (ROW).

Explanation:

Loans from the rest of the world result in an inflow of foreign currency into the country. As a result, it is a source of supply rather than demand for foreign exchange.