Explain official reserve assets and its major components, Financial Management

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Explain official reserve assets and its major components.

Answer:  Official reserve assets are those financial assets which can be employed as international means of payments. At present, official reserve assets have: (I) gold, (ii) foreign exchanges, (iii) special drawing rights (SDRs), and (iv) reserve positions along with the IMF. Foreign exchanges are by far the most significant official reserves.


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