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in Economics by kratos

What is meant by 'Official Reserve Transactions'? Discuss their importance in Balance of Payments.

1 Answer

+2 votes
by kratos
 
Best answer

Transactions by a Central Bank that changes in its official reserves. These are usually purchases or sales of its own currency in the exchange market in exchange for foreign currencies or other foreign-currency-denominated assets.

They may be Autonomous Receipts and Autonomous payments, disequilibrium between which may occur as deficit/surplus in Balance of Payments.

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