Question : Which account in the Balance of Payments represents changes in a country's official reserves?
Option 1: Current Account
Option 2: Capital Account
Option 3: Financial Account
Option 4: Reserve Account
Answer (1)
22nd Jan, 2024
Correct Answer: Reserve Account
Solution : The correct answer is (d) Reserve Account
The Reserve Account, also known as the Official Reserve Account or the Balance of Payments Adjustment Account, tracks the changes in a country's official reserves, including its foreign exchange reserves. It records transactions related to the acquisition or disposal of official reserve assets, such as foreign currencies, gold, Special Drawing Rights (SDRs), and reserve position in the International Monetary Fund (IMF).
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