Economics · Foreign Exchange Reserves
Why is a low level of foreign exchange reserves considered a critical problem for an economy like India?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It means the country can barely afford to pay for essential imports for a very short period.✓
- 2It restricts foreign tourists from traveling abroad.
- 3It prevents the central bank from printing domestic currency in the future.
- 4It indicates that the nation is an exceptionally lucrative investment target.
Correct answer
It means the country can barely afford to pay for essential imports for a very short period.
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