Current Affairs · RBI Policy & Foreign Exchange
The data released by RBI on sources of variation in foreign exchange reserves showed a divergence between nominal reserve movement and BoP-based movement during April–December 2025. Which of the following best explains this divergence?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Net capital inflows alone were large enough to offset the current account deficit
- 2The current account recorded a surplus and therefore reserves rose under both measures
- 3Gold imports were excluded from reserve accounting during the period
- 4Valuation gains were substantial even though reserves declined on a BoP basis✓
Correct answer
Valuation gains were substantial even though reserves declined on a BoP basis
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