Answers:
The foreign exchange reserve of India, which was
$291.802 billion as on 27 May 2012, comprises Special Drawing Rights (SDRs),
Foreign Currency Assets (FCA) and Reserve Tranche Position (RTP) at the IMF.
This level is determined largely by the Reserve Bank of India’s open market
operations in the Forex exchange market to even out the volatility in exchange
rates and its valuation changes according to the movement of dollar against the
other major currencies.