Which of the following is not one of the components of ‘International Reserve’ ?
Money Market Instruments
International reserves are external assets that are readily available to and controlled by the monetary authority for meeting balance of payments needs and for intervening in the foreign exchange market.
The standard classification used by the IMF, and by the RBI for India's foreign exchange reserves, lists four components: foreign currency assets, monetary gold, Special Drawing Rights and the reserve position (reserve tranche) in the IMF.
Special Drawing Rights are the IMF's own reserve asset allocated to member countries. The reserve position in the IMF is the part of a member's quota that it can draw without conditions. Monetary gold is gold held by the monetary authority as a reserve asset. Each of these is a separate component of international reserves.
Money market instruments such as treasury bills, commercial paper and certificates of deposit are short-term debt instruments of the money market. They are not a component of international reserves in their own right; foreign-currency money market paper held by a central bank is counted only within its foreign currency assets.
Hence, Money Market Instruments.
Similar Questions
In computation of balance of payments, overall balance of payments =
Which of the following can be included in the current account of the balance of payments ?
(i) Purchase of goods from abroad
(ii) Sale of services abroad
(iii) Workers’ remittances from aboard
(iv) Sale of copyright to foreigners
(v) Direct investment in equity capital
Codes :
Match the items of List – I with items in List – II and select a correct code :
List – I List – II a. Current Account i. Official Capital b. Capital Account ii. Reserves from foreign countries c. Unilateral Payments iii. Reparations d. Official Statement Account iv. Visible Exports and Imports Codes :
a b c d
Important Questions from Balance of payments (BOP)
Which of the following statements is correct?
Which of the following statements is INCORRECT?
Balance of Trade is measured as:
- If there is a balance of payments deficit then in a floating exchange rate system :
- Devaluation, will improve the balance of payment deficit, if sum of elasticity of exports and imports of the devaluing country is :
