Quote:
Originally Posted by kishwar Khanm
what is foreign exchange reserve /? and as we have taken loan from IMf that is also a shape of rupee this does not degrade our economy as is done by pulisguhing our own?
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Few points for you.
•FOREX or Foreign Exchange means other countries' money.
•The foreign exchange rate is the rate at which one one country's money can be turned into others'
•Foreign Exchange Reserves are stocks of gold or convertible foreign currency held by Central Banks (SBP in case of Pakistan) or governments to enable them to intervene in foreign exchange markets to influence the exhange rate.
•The loan from IMF is in form of US dollars or SDRs-Special drawing Rights-IMF's currency(a pool of currencies) not in Pakistani rupees.
•Thus FOREX reserves are used to influence foreign exchange rate and to foot the import bills usually for imported oil.
Hope you understand..