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MANAGEMENT OF FOREIGN EXCHANGE RESERVES
Who is the custodian of India's foreign exchange reserves?
The Reserve Bank of India (RBI) is the custodian of India's foreign exchange reserves, managing them on behalf of the Government of India.
What is the primary purpose of holding foreign exchange reserves by a central bank?
To ensure external sector stability and meet balance of payments needs.
What are the primary objectives of managing foreign exchange reserves in India?
The primary objectives are safety, liquidity, and returns — in that order — ensuring reserves are available to meet external obligations while earning reasonable returns.
What is the 'Three-Tier' investment framework used by RBI for managing foreign exchange reserves?
Safety, liquidity, and returns are the three tiers prioritized in that order.
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