CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Foreign Exchange Reserves and Exchange Rate
A rupee move from 280/USD to 270/USD represents:
A. Appreciation of the rupee
B. Depreciation of the rupee
C. A trade embargo
D. No change
Correct Answer: A
This tests the standard external-sector relationship described in the question.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Foreign Exchange Reserves and Exchange Rate
A rupee move from 270/USD to 280/USD represents:
A. Depreciation of the rupee
B. Appreciation of the rupee
C. No change
D. A fiscal surplus
Correct Answer: A
This tests the standard external-sector relationship described in the question.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Foreign Exchange Reserves and Exchange Rate
If SBP sells dollars to meet FX demand, its reserves will generally:
A. Fall
B. Rise
C. Double automatically
D. Become exports
Correct Answer: A
This tests the standard external-sector relationship described in the question.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Foreign Exchange Reserves and Exchange Rate
If SBP buys dollars from the market, its reserves will generally:
A. Rise
B. Fall
C. Remain legally fixed
D. Become tax revenue
Correct Answer: A
This tests the standard external-sector relationship described in the question.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Foreign Exchange Reserves and Exchange Rate
The real effective exchange rate (REER) adjusts the currency's value for:
A. Relative prices and trade weights
B. Only nominal GDP
C. Only rainfall
D. Only tax rates
Correct Answer: A
REER is a trade-weighted, inflation-adjusted competitiveness indicator.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Foreign Exchange Reserves and Exchange Rate
Which factor can improve reserves without increasing exports?
A. Higher remittances
B. Higher imports
C. External debt repayment
D. Capital outflow
Correct Answer: A
Remittances add FX independently of merchandise exports.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Foreign Exchange Reserves and Exchange Rate
A large gap between interbank and informal-market exchange rates may encourage:
A. Market distortions and diversion of FX flows
B. Perfect price discovery
C. Automatic reserve growth
D. Zero inflation
Correct Answer: A
Multiple-rate gaps can distort incentives and formal inflows.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Foreign Exchange Reserves and Exchange Rate
Import cover is commonly expressed as:
A. Months of imports covered by reserves
B. Years of tax collection
C. Days of rainfall
D. Number of banks
Correct Answer: A
Reserve adequacy is often gauged in months of prospective imports.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Foreign Exchange Reserves and Exchange Rate
External debt repayments tend to:
A. Reduce FX reserves, other things equal
B. Increase FX reserves automatically
C. Have no external-account effect
D. Create tax revenue
Correct Answer: A
Repayment sends foreign currency abroad.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Foreign Exchange Reserves and Exchange Rate
An IMF disbursement can directly support Pakistan's:
A. Foreign exchange reserves
B. Provincial land records
C. Census enumeration
D. Domestic wheat acreage
Correct Answer: A
External official financing adds foreign currency liquidity.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Foreign Exchange Reserves and Exchange Rate
Which is part of Pakistan's total liquid FX reserves?
A. SBP reserves plus banks' net reserves
B. Only gold jewelry held by households
C. Only FBR tax receipts
D. Only provincial cash balances
Correct Answer: A
Official total liquid reserves combine SBP and commercial-bank net reserves.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Foreign Exchange Reserves and Exchange Rate
Higher exports can support the rupee by:
A. Increasing FX supply
B. Reducing FX supply
C. Banning remittances
D. Increasing import demand directly
Correct Answer: A
Exporters bring foreign-currency proceeds into the economy.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Foreign Exchange Reserves and Exchange Rate
A rise in oil import prices can, other things equal:
A. Increase demand for foreign currency
B. Reduce all import payments
C. Automatically appreciate the rupee
D. Eliminate trade deficit
Correct Answer: A
More dollars are needed to pay a larger oil import bill.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Foreign Exchange Reserves and Exchange Rate
SBP intervention in the FX market may involve:
A. Buying or selling foreign currency
B. Changing provincial borders
C. Setting customs classifications only
D. Issuing passports
Correct Answer: A
Central banks may buy/sell FX to manage liquidity and disorderly conditions.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Foreign Exchange Reserves and Exchange Rate
A market-based exchange rate is primarily determined by:
A. Demand and supply of foreign currency
B. NFC formula alone
C. Census population only
D. PSDP allocation only
Correct Answer: A
FX demand and supply are central to market price formation.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Foreign Exchange Reserves and Exchange Rate
The exchange rate directly affects the rupee cost of:
A. Imported goods and external debt service
B. Only domestic wheat output
C. Only local property records
D. Only provincial salaries
Correct Answer: A
Dollar-priced imports and debt service become more or less costly in rupees as the exchange rate changes.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Foreign Exchange Reserves and Exchange Rate
A current-account deficit can put pressure on reserves when it is not fully financed by:
A. Capital and financial inflows
B. Domestic sales tax
C. Provincial property tax
D. Census grants
Correct Answer: A
External deficits require financing from capital inflows or reserve drawdown.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Foreign Exchange Reserves and Exchange Rate
Workers' remittances generally support:
A. The current account and FX availability
B. Only the fiscal deficit
C. Only provincial tax collection
D. Only stock exchange listings
Correct Answer: A
Remittances are a major source of foreign exchange.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Foreign Exchange Reserves and Exchange Rate
Which transaction tends to use foreign exchange reserves or market FX?
A. Import payments
B. Workers' remittances received
C. Foreign direct investment inflow
D. Export receipts
Correct Answer: A
Imports require payment in foreign currency.
CSS - PMS - CCE - PCS - Current Affairs (C.A)
Pakistan Foreign Exchange Reserves and Exchange Rate
Which transaction tends to add foreign exchange to Pakistan?
A. Export receipts
B. Import payments
C. External debt repayment
D. Capital flight
Correct Answer: A
Export receipts bring foreign currency into the country.