Is the custodian of foreign exchange reserve?

The RBI acts as the custodian of the country’s foreign exchange reserves, manages exchange control and acts as the agent of the government in respect of India’s membership of the IMF.

Who is the custodian of the foreign exchange reserves of India?

In India, the Reserve Bank of India Act 1934 contains the enabling provisions for the Reserve Bank to act as the custodian of foreign reserves, and manage reserves with defined objectives.

What is custodian of foreign balances?

Function 4 # Custodian of Foreign Balances:

It is the function of the central bank to maintain the exchange rate fixed by the government and manage exchange control and other restrictions imposed by the state. Thus, it becomes a custodian of nation’s reserves of international currency or foreign balances.

Why is central bank considered as custodian of foreign exchange?

The central bank controls both the receipts and payments of foreign exchange. 2. It tries to maintain stability of the exchange rate. For this purpose, it buys or sells foreign currencies in the market to minimise fluctuations in the foreign exchange rates.

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Who is the issuer of currency?

The Reserve Bank is the nation’s sole note issuing authority. Along with the Government of India, we are responsible for the design, production and overall management of the nation’s currency, with the goal of ensuring an adequate supply of clean and genuine notes.

What is custodian of cash reserve?

It is on the basis of these reserves that the central bank transfers funds from one bank to another to facilitate the clearing of cheques. Thus the central bank acts as the custodian of the cash reserves of commercial banks and helps in facilitating their transactions.

Is a custodian a fiduciary?

A custodian is not a fiduciary and is responsible only for safekeeping of assets. … The custodian may make payments and distributions if directed.

What is the role of a custodian?

The custodian is often referred to as the gatekeeper of assets whose function is to track monies and assets moving into and out of the account; and they are entrusted to render regular financial valuation of such assets held in custody.

What do you mean by custodian of foreign reserve function of central bank?

Custodian of foreign exchange reserves The Central Bank is the custodian of country’s stock of gold and international currencies. The Central Bank maintains the stability of exchange rate. All earnings in foreign exchange transactions are to be deposited with the Central Bank and are routed through it.

In which of the following central bank does not maintain any reserves of foreign currency?

Central bank does not maintain any reserves of foreign currency in floating exchange rate system.

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Where is the reserve of forex recorded?

In a central bank’s accounts, foreign exchange reserves are called reserve assets in the capital account of the balance of payments, and may be labeled as reserve assets under assets by functional category.

Who is the creator of money?

Yes, commercial banks are considered the creator of money in the economy. The creation of money in the economy is done by the process of demand deposits. The process of creating demand deposits leads to the creation of more credit than the initial deposits.

Who issues the currency of a country?

The coins are issued for circulation only through the Reserve Bank in terms of Section 38 of the RBI Act. 4. What is a currency chest? To facilitate the distribution of banknotes and rupee coins, the Reserve Bank has authorised select scheduled banks to establish currency chests.

Who regulate the money supply?

The Reserve Bank of India (RBI) is vested with the responsibility of conducting monetary policy. This responsibility is explicitly mandated under the Reserve Bank of India Act, 1934.