Q. Which of the following is/are probable reasons for variation in India’s forex reserves?
1. Movement in gold prices
2. Inflow of aid receipts
3. Interest earnings from foreign currency assets
Select the correct answer from the codes given below: 
Answer: D
Notes:
All are reasons for variation in India’s forex reserves
Reasons for Variation in Forex Reserves: Variation in India’s forex reserves is primarily due to:
- RBI’s intervention in the foreign exchange market to smoothen exchange rate volatility
- Valuation changes due to the movement of the US dollar against other international currencies in the reserve basket
- Movement in gold prices
- Interest earnings from the deployment of foreign currency assets and
- The inflow of aid receipts.
Source: Article
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