Multiple choice

The custodian of foreign exchange refers to

  1. central bank

  2. any particular commercial bank

  3. all commercial banks

  4. none of these

Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The central bank (RBI in India) acts as the custodian of the country's foreign exchange reserves, managing forex reserves and regulating foreign exchange transactions to maintain external stability. Commercial banks facilitate forex transactions but don't hold or manage the nation's reserves.