UPSC Prelims Practice Questions — RBI asks state oil refiners to curb spot dollar buying, sources say

Q1. As part of its 2026 rupee-defence operations, the RBI conducted a long-term foreign exchange buy/sell swap auction. What was the size of this swap auction conducted in February-March 2026?

  • A. USD 5 billion
  • B. USD 10 billion
  • C. USD 25 billion
  • D. USD 50 billion

Q2. In the 2026 measure, the RBI asked state-run oil refiners to consolidate and route their daily dollar purchases through a single designated bank rather than buying spot dollars from multiple banks. Which one of the following was designated as that lead conduit bank?

  • A. Punjab National Bank
  • B. Bank of Baroda
  • C. State Bank of India
  • D. Canara Bank

Q3. Under the Special Rupee Vostro Account (SRVA) mechanism for settling international trade in Indian Rupees, the authorisation framework for opening such accounts by Authorised Dealer banks is administered by which one of the following?

  • A. Securities and Exchange Board of India
  • B. Reserve Bank of India
  • C. Directorate General of Foreign Trade
  • D. Department of Financial Services

Q4. The Special Rupee Vostro Account (SRVA) arrangement, later promoted for settling oil and other trade in rupees, was formally introduced by the RBI in which year?

  • A. 2018
  • B. 2020
  • C. 2022
  • D. 2024

Q5. How many underground strategic crude oil storage facilities have been commissioned under Phase I of India's Strategic Petroleum Reserve programme?

  • A. Two
  • B. Three
  • C. Five
  • D. Seven

Q6. With reference to the factors driving the rupee's depreciation in 2026, consider the following: Which of the statements given above are correctly identified as pressures on the rupee?

  1. Net outflows of foreign portfolio investment from Indian equities
  2. A surge in global crude oil prices linked to the West Asia (Iran-Israel) conflict
  3. Concerns over a widening current account deficit and imported inflation
  4. A record merchandise trade surplus with the United States
  • A. 1 and 2 only
  • B. 1, 2 and 3
  • C. 2, 3 and 4
  • D. 1, 3 and 4

Q7. In discussions of the 2026 rupee slide, 'Foreign Portfolio Investment (FPI)' outflows are cited as a key pressure. Which one of the following best describes Foreign Portfolio Investment?

  • A. Investment made to acquire a lasting management interest and control in an enterprise abroad
  • B. Investment in financial assets such as shares and bonds without acquiring management control of the enterprise
  • C. Long-term borrowing by the government from multilateral institutions
  • D. Cross-border remittances sent by non-resident individuals to their families

Q8. With reference to the statutory framework governing the Reserve Bank of India, consider the following statements: Which of the statements given above are correct?

  1. Foreign exchange management in India is governed by the Foreign Exchange Management Act, 1999
  2. The flexible inflation-targeting framework has a statutory basis under the RBI Act, 1934 as amended in 2016
  3. The CPI inflation target is 4% with a tolerance band of 2% to 6%
  4. The RBI is the statutory regulator of India's securities markets
  • A. 1, 2 and 3
  • B. 1 and 4 only
  • C. 2, 3 and 4
  • D. 1 and 3 only

Q9. With reference to the State Bank of India, which was designated to pool oil refiners' dollar demand, consider the following statements: Which one of the above statements is NOT correct?

  1. It was constituted under the State Bank of India Act, 1955
  2. It was created by converting the erstwhile Imperial Bank of India
  3. It is at present majority-owned by the Reserve Bank of India
  4. It is India's largest commercial bank by assets
  • A. 1 only
  • B. 3 only
  • C. 4 only
  • D. 2 and 4