Consider the following statements and identify the correct option:
(i) The Reserve Bank of India (RBI) is the custodian of the country's foreign exchange reserves.
(ii) It acts to keep the exchange rate of the domestic currency stable within targeted bands.
- A(i) only
- B(ii) only
- Cboth (i) and (ii) only
- DNone of the above
Solution & Step-by-step Explanation
Both statements are completely correct. The RBI actively holds and manages India's foreign currency assets and gold reserves. It also intervenes in the foreign exchange market by buying or selling foreign currencies to curb extreme volatility and maintain the stability of the Indian Rupee ().