For India, which one of the following is the odd one out?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Bonds issued by the Government of India and held by the RBI
Foreign exchange is the currency or bonds of another country. Dollars, pounds and Japanese government bonds all belong to other countries, so they are foreign exchange for India.
Bonds issued by the Government of India are India’s own. They are not foreign exchange for India.
NCERT (2026-27): Glossary: “Foreign Exchange – Currency or bonds of another country.” “3.1 Introduction … In 1991, India met with an economic crisis relating to its external debt — the government was not able to make repayments on its borrowings from abroad; foreign exchange reserves, which we generally maintain to import petroleum and other important items, dropped to levels that were not sufficient for even a fortnight. …” |