Question

Which function ensures stability of Indian currency?

• A. Issue of currency notes
• B. Custodian of foreign exchange
• C. Banker’s bank
• D. Credit control

Answer 1

Answer:

B. Custodian of foreign exchange

RBI manages India’s foreign exchange reserves and regulates foreign exchange transactions. By maintaining a balance between foreign currency inflows and outflows, RBI stabilizes the value of the Indian rupee in international markets.