Which of the following statement/statements are true?
Statement 1: Government does not intervene to manage the exchange rate in managed floating system.
Statement 2: Spot market deals in transactions meant for future delivery.
Statement 1: Government does not intervene to manage the exchange rate in managed floating system.
Statement 2: Spot market deals in transactions meant for future delivery.
Answer & explanation
Correct answer: option 3
Statement 1 is true, statement 2 is false. Spot market deals in current transactions. Government does not intervene to manage the exchange rate in managed floating system. in managed floating system of exchange rate, government does not intervene rather it is RBI that intervenes sometimes. Government and RBI are different entities.