A central bank or monetary authority hold foreign currency for the purpose of exchange intervention and the settlement of intergovernmental claims. Term the currency ?
Correct answer: A. Reserve currency
- A. Reserve currency
- B. Hot currency
- C. Pegged currency
- D. Hard currency
Explanation
Foreign currency held by a central bank for intervention and international settlements is called reserve currency. It forms part of a country’s official foreign-exchange reserves.
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