Q. Which of the following is/are consist/s of foreign exchange reserves?
1.Foreign currency assets
2.Special drawing rights
3.Digital currency assets
Choose the correct answer from below given codes:

[A] 1 only

[B] 1 and 2 only

[C] 2 and 3 only

[D] 1, 2 and 3

Answer: B

Explanation: The total foreign currencies (of different countries) an economy possesses at a point of time is its ‘foreign currency assets/reserves’.

The Forex Reserves (short for ‘foreign exchange reserves’) of an economy is its ‘foreign currency assets’ added with its gold reserves, SDRs (Special Drawing Rights) and Reserve Tranche in the IMF.

Source: Ramesh Singh