BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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All of the following are useful options for the government to pursue to bolster foreign exchange reserves, except to
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impose exchange controls
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impose export controls
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adjust the exchange rate
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permit a free floating exchange rate
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Explanation:
Detailed explanation-1: -Exports, direct purchases, and remittances from abroad are sources of supply of foreign currency.
Detailed explanation-2: -Freely floating exchange rate system. Monetary system in which exchange rates are allowed to move due to market forces without intervention by country governments.
Detailed explanation-3: -A floating exchange rate refers to an exchange rate system where a country’s currency price is determined by the relative supply and demand of other currencies. Currencies with floating exchange rates can be traded without any restrictions, unlike currencies with fixed exchange rates.
Detailed explanation-4: -India follows a managed floating rate system.
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