Economics • Indian EconomyMedium
Which of the following constitutes the largest component of India's foreign exchange reserves?
A. Foreign Currency Assets (FCAs)✓ Correct Answer
B. Gold reserves
C. Special Drawing Rights (SDRs)
D. Reserve Tranche Position in the IMF
💡 Solution & Explanation
Foreign Currency Assets constitute the largest portion of India's foreign exchange reserves, held in major global currencies and managed by the Reserve Bank of India. Other components like gold reserves and SDRs comprise smaller shares of the overall basket. India's forex reserves also include Reserve Tranche Position with the International Monetary Fund.
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