What are the functions of the Reserve Bank of India as a custodian of

1.	What are the functions of the Reserve Bank of India as a custodian of foreign exchange ?
Answer» The central bank is a custodian of the country’s stock of gold and foreign currencies. The central bank maintains the stability of exchange rate fixed by the government. The central bank performs two major functions in the field of foreign exchange : One, it is the custodian of the country’s reserves of international currencies, and second, it maintains stability of exchange rate of domestic currency. In this way, the loans can be fulfilled at the time of need, and the people going to foreign countries are also provided with the required currency.

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