Question

State the main sources of supply of foreign exchange.

Answer 1

1. Foreign consumers purchase goods and services from domestic manufacturers in foreign currencies.
2. Foreign exchange is generated via foreign direct investment (FDI) and foreign portfolio investment (FPI).
3. Citizens or non-resident Indians (NRIs) who work overseas send money home.
4. Foreign currency used by visitors to the nation is exchanged for local currency.
5. loans and assistance from foreign governments or international organizations.