The IMF’s Special Drawing Right (SDR) is valued against a basket of which five currencies?

US dollar, euro, Chinese renminbi, Japanese yen, pound sterling

US dollar, euro, Swiss franc, Japanese yen, pound sterling

US dollar, euro, Indian rupee, Chinese renminbi, Japanese yen

US dollar, gold, euro, pound sterling, Japanese yen

Remittances sent home by Indians working abroad are recorded in India’s balance of payments under:

The current account, as secondary income

The capital account, as foreign direct investment

The current account, as secondary income

The financial account, as portfolio investment

Foreign-exchange reserves, as foreign currency assets

The difference between a "devaluation" and a "depreciation" of a currency is that:

Devaluation is an official lowering of a fixed exchange rate; depreciation is a fall in a market-determined rate

Devaluation is a fall caused by market forces; depreciation is a fall ordered by the government

Devaluation is an official lowering of a fixed exchange rate; depreciation is a fall in a market-determined rate

Devaluation applies to gold; depreciation applies to paper money

There is no difference; the words are interchangeable

The New Development Bank (NDB), headquartered in Shanghai, was established by:

The Shanghai Cooperation Organisation

The Human Development Index (HDI) is published by:

The United Nations Development Programme

The International Monetary Fund

India is a full member of all of the following EXCEPT:

The Shanghai Cooperation Organisation

The World Trade Organization came into being in 1995 as the successor to:

The General Agreement on Tariffs and Trade (GATT)

The International Trade Organization

The General Agreement on Tariffs and Trade (GATT)

The World Economy, Trade Bodies, and Reading the Business Pages

The international half of business awareness is asked in one of two shapes. The first is structure: which arm of the World Bank does what, which five currencies make up the IMF's unit of account, which account of the balance of payments a remittance lands in, whether India is a member of a grouping or only a partner. The second is the news: the summit that just happened, the index India just moved on, the body that just admitted a new member. This chapter equips you for both. Sections one to four are the structure — the part that does not change. Section five is method: how to build a current-affairs bank in the months before the exam without memorising a single figure that will be stale by exam day. It is the only section in this course that tells you how to study rather than what to know, and it is here because the section rewards a system more than a memory.

The Bretton Woods Twins and the WTO — by What They Do

The IMF and the World Bank were both created at the Bretton Woods conference of 1944 and both sit in Washington, D.C. — the static-GK chapter has those facts. The section asks the difference. The IMF lends to a country in balance-of-payments trouble, on conditions, and monitors every member’s economy (the annual "Article IV" consultation). The World Bank lends for development — roads, power, schools — and is not one body but five.

The five arms of the World Bank Group
Arm	Lends or serves
IBRD — International Bank for Reconstruction and Development (1944)	Loans at near-market rates to middle-income governments. "The World Bank" in ordinary speech.
IDA — International Development Association (1960)	Grants and interest-free credits to the poorest countries.
IFC — International Finance Corporation (1956)	Lends to and invests in private companies in developing countries — the only arm that deals with firms rather than governments.
MIGA — Multilateral Investment Guarantee Agency (1988)	Insures foreign investors against political risk — expropriation, war, currency controls.
ICSID — International Centre for Settlement of Investment Disputes (1966)	Arbitrates disputes between foreign investors and host governments.

The IMF’s own currency is the Special Drawing Right (SDR) — not money you can spend, but a claim on members’ reserves, valued against a basket of five currencies: the US dollar, the euro, the Chinese renminbi (added in 2016), the Japanese yen and the pound sterling. A member’s quota sets how much it pays in, how much it can borrow, and how many votes it has — which is why quota reform is a perennial demand of emerging economies.

Trade has a third body. The World Trade Organization began on 1 January 1995, replacing the GATT of 1947, and sits in Geneva. Two principles run through its rules: most-favoured-nation treatment (a concession given to one member must be given to all) and national treatment (imported goods, once inside, are treated like domestic ones). Its Ministerial Conference meets about every two years; its dispute settlement system is the one court-like mechanism in global trade; and the Doha Round of negotiations, launched in 2001, is the round that never concluded.

The Balance of Payments and the Rupee

The balance of payments records every transaction between India and the rest of the world, in two accounts. The current account is trade and income: exports and imports of goods, trade in services (software, tourism), primary income (interest and dividends crossing the border) and secondary income — chiefly remittances from Indians abroad, of which India is the world’s largest recipient. A current account deficit (CAD) means the country consumed more from abroad than it earned there. The capital and financial account is how that gap is financed: FDI, FPI, external borrowing, and banking flows. The two accounts must balance, with reserves absorbing the difference.

Words about the rupee that are not interchangeable
Word	Meaning
Depreciation	The rupee falls against another currency because of market forces — supply and demand for rupees. What happens day to day in a floating or managed-float regime.
Devaluation	The government or central bank officially lowers a fixed exchange rate by decree. India devalued in 1966 and, in two steps, in July 1991. Under today’s managed float the word does not strictly apply.
Appreciation	The rupee rises in the market. Imports get cheaper; exporters earn fewer rupees per dollar.
Managed float	India’s regime: the market sets the rate, but the RBI buys or sells dollars to smooth sharp moves. It does not defend a fixed level.

The RBI’s foreign-exchange reserves have four parts: foreign currency assets (by far the largest), gold, SDRs, and India’s reserve tranche position at the IMF. And the line between FDI and FPI has a number: by the convention India follows, a foreign holding of 10% or more of a company’s equity is direct investment; below that it is portfolio investment.

Groupings and Development Banks — Member or Partner?

The commonest trap in this topic is a grouping India is close to but not in. India is a member of the G20, BRICS, the SCO, SAARC and the Quad; it is a dialogue partner of ASEAN, not a member; and it is not in the G7 or OPEC, though it is regularly invited to G7 summits as a guest.

Groupings and banks, with the fact that gets asked
Body	Since	What to know
G7	1975	Seven large advanced economies plus the EU. No secretariat; the presidency rotates yearly. India is a frequent guest, not a member.
G20	1999	Began as finance ministers; leaders’ summits since 2008. Nineteen countries plus the EU (the African Union joined in 2023). India held the presidency in 2023, hosting the New Delhi summit in September.
BRICS	2009 (first summit)	Brazil, Russia, India, China; South Africa joined in 2010. Expanded to new members from 2024. Its bank is the New Development Bank, Shanghai, 2015.
ASEAN	1967	Ten South-East Asian states; secretariat in Jakarta. India is a dialogue partner and has a free-trade agreement with it, but is not a member.
SAARC	1985	Eight South Asian countries; secretariat in Kathmandu. Largely dormant because summits require every member to attend.
SCO — Shanghai Cooperation Organisation	2001	A Eurasian security and economic bloc led by China and Russia; secretariat in Beijing. India became a full member in 2017.
Quad	Revived 2017	India, the United States, Japan and Australia — a strategic dialogue, not a treaty alliance and not a trade bloc.
OPEC	1960	Oil exporters’ cartel, headquartered in Vienna since 1965. Sets output quotas; India, as a large importer, is on the receiving end of its decisions.
ADB — Asian Development Bank	1966	Manila. Japan and the United States are the largest shareholders; India is among its biggest borrowers.
AIIB — Asian Infrastructure Investment Bank	2016	Beijing, China-led. India is the second-largest shareholder after China and one of its largest borrowers.

Indices and Who Publishes Them

A rank in a global index is asked as "who publishes it", never as the rank itself — the rank is new every year. Learn the publisher, and learn the one lesson every index teaches: an index is a method, and a rank moves when the method moves, not only when the country does.

Index → publisher
Index	Published by	Measures
Human Development Index	UNDP, since 1990	Life expectancy, years of schooling and income per head, combined. The idea of Mahbub ul Haq and Amartya Sen.
Global Hunger Index	Concern Worldwide and Welthungerhilfe — two NGOs	Undernourishment, child wasting, child stunting, child mortality. India disputes its method — itself a favourite question.
Corruption Perceptions Index	Transparency International	Perceived public-sector corruption, scored 0–100.
Global Gender Gap Index	World Economic Forum	Gaps in economic participation, education, health and political empowerment.
World Press Freedom Index	Reporters Without Borders (RSF)	Media freedom by country.
Ease of Doing Business	World Bank — discontinued in September 2021 after data irregularities	The cautionary example: a headline index that no longer exists. A question that treats it as current is testing whether you know that.
Logistics Performance Index	World Bank	Customs, infrastructure, shipment ease and tracking — the trade-facilitation index that replaced Ease of Doing Business in most business headlines.

Reading the Business Pages for the Section — a Method

Roughly a third of the General Awareness questions are current affairs, drawn from about the twelve months before the exam, with a business tilt. No chapter can contain them, because they are different for every sitting. What a chapter can give you is the system. Five rules:

Keep five buckets, not one list. Appointments (heads of the RBI, SEBI, the CJI, the CEC, the CAG, public sector chiefs); policy and budget (a new scheme, a rate decision, a bill passed); corporate (a merger, a large IPO, a bankruptcy resolution, a brand acquisition); global (summits, admissions to groupings, central-bank moves abroad); awards, sport and books. A question is always asked from one bucket, so revision by bucket matches the exam.
One line per item, with a date. "Month — who — did what — number if any." A fact without its month cannot be placed against the twelve-month window, and a fact without a number is usually not what was asked.
Verify against the primary source before it goes in the notebook. An RBI press release, a PIB release, a company’s stock-exchange filing, the body’s own website. News reports get numbers wrong; the exam is set from the source.
Learn the direction and the decider, not the level. Not "the repo rate is X" but "the MPC raised / held / cut, and why". Levels are stale by exam day; the direction and the reasoning are what the question turns on.
Connect every news item to a structure in this course. A new RBI governor → the RBI’s five jobs. A big IPO → primary market, book-building. A downgrade → rating scale. A summit → the groupings table. The structure is what makes the news item stick, and it is also what the second question on the same topic will ask.

🎯 Why this chapter refuses to list current affairs

A list printed today is wrong for every candidate who reads it next year, and worse than wrong: it is confidently wrong, in the voice of a textbook. The static-GK chapter and the four chapters of this subject hold everything that will still be true. The twelve-month window is yours to build, by the method above, from the sources named.

Key takeaways

The IMF lends for balance-of-payments trouble and monitors; the World Bank lends for development through five arms — IBRD to middle-income governments, IDA to the poorest, IFC to private firms, MIGA for political-risk insurance, ICSID for disputes.
The SDR is valued on five currencies: dollar, euro, renminbi (2016), yen, sterling. Quotas decide contributions, borrowing limits and votes.
The WTO (1995, Geneva) replaced GATT (1947). Most-favoured-nation and national treatment are its two principles; the Doha Round never concluded.
Remittances sit in the current account (secondary income); FDI and FPI sit in the capital and financial account. Depreciation is the market; devaluation is a decree (India: 1966 and 1991).
Member or partner: India is in the G20, BRICS, SCO (since 2017), SAARC and the Quad; a dialogue partner of ASEAN; a guest at the G7; not in OPEC. NDB is BRICS’s bank (Shanghai, 2015); India is the AIIB’s second-largest shareholder.
Learn the publisher of an index, never the rank: HDI is UNDP’s, the Hunger Index two NGOs’, Corruption Perceptions Transparency International’s, Gender Gap the WEF’s. Ease of Doing Business was discontinued in 2021.
For current affairs: five buckets, one dated line per item, verified against the primary source, direction over level, and every item tied to a structure in this course.

Practice questions (8)

Attempt each one before opening the answer. Every explanation names the tempting wrong option as well as the right one, because that is where marks are lost.

Which arm of the World Bank Group lends to and invests in private-sector companies in developing countries?
1. IBRD
2. IDA
3. IFC
4. MIGA
Show answer
Answer: C — IFC
The International Finance Corporation (1956) is the World Bank Group’s private-sector arm — the only one whose counterparties are firms, not governments. IBRD lends to middle-income governments and IDA gives concessional finance to the poorest countries; MIGA does not lend at all, it insures investors against political risk. The question is set because "World Bank" in ordinary speech means IBRD, and the section wants to know you can tell the five apart.
The IMF’s Special Drawing Right (SDR) is valued against a basket of which five currencies?
1. US dollar, euro, Chinese renminbi, Japanese yen, pound sterling
2. US dollar, euro, Swiss franc, Japanese yen, pound sterling
3. US dollar, euro, Indian rupee, Chinese renminbi, Japanese yen
4. US dollar, gold, euro, pound sterling, Japanese yen
Show answer
Answer: A — US dollar, euro, Chinese renminbi, Japanese yen, pound sterling
The basket has been dollar, euro, renminbi, yen and sterling since the renminbi was added in October 2016 — the first change to the basket since the euro replaced the mark and franc. The Swiss franc (option B) is a major reserve currency but is not in the basket; the rupee (option C) is not freely usable enough to qualify; gold (option D) left the system in the 1970s. The renminbi’s inclusion is the detail most often tested.
Remittances sent home by Indians working abroad are recorded in India’s balance of payments under:
1. The capital account, as foreign direct investment
2. The current account, as secondary income
3. The financial account, as portfolio investment
4. Foreign-exchange reserves, as foreign currency assets
Show answer
Answer: B — The current account, as secondary income
A remittance is a transfer — money sent with nothing given in return — and transfers are secondary income in the current account. India is the world’s largest recipient, and remittances are the main reason India’s current account deficit is smaller than its trade deficit. They are not investment of any kind (options A and C), because the sender acquires no asset. Reserves (option D) are a stock the RBI holds, not a flow in the accounts.
The difference between a "devaluation" and a "depreciation" of a currency is that:
1. Devaluation is a fall caused by market forces; depreciation is a fall ordered by the government
2. Devaluation is an official lowering of a fixed exchange rate; depreciation is a fall in a market-determined rate
3. Devaluation applies to gold; depreciation applies to paper money
4. There is no difference; the words are interchangeable
Show answer
Answer: B — Devaluation is an official lowering of a fixed exchange rate; depreciation is a fall in a market-determined rate
Devaluation is a deliberate act — the authority that fixes the rate lowers it, as India did in 1966 and in July 1991. Depreciation is the market doing it, which is what happens to the rupee under today’s managed float. Option A has the two exactly reversed, which is the common error. The distinction matters in the news: a headline that says the rupee was "devalued" today is using the wrong word, and a question may be built on that.
The New Development Bank (NDB), headquartered in Shanghai, was established by:
1. ASEAN
2. The BRICS countries
3. The Shanghai Cooperation Organisation
4. The G20
Show answer
Answer: B — The BRICS countries
The NDB was agreed by the BRICS members and opened in 2015 in Shanghai, with the presidency rotating among the founders. It is easily confused with the AIIB (Beijing, 2016), which is China-led but has a much wider membership, with India as its second-largest shareholder. The SCO (option C) also has Shanghai in its name and its secretariat in Beijing, which is why it is offered as a distractor — but it has no development bank of its own.
The Human Development Index (HDI) is published by:
1. The World Bank
2. The United Nations Development Programme
3. The World Economic Forum
4. The International Monetary Fund
Show answer
Answer: B — The United Nations Development Programme
The HDI has appeared in the UNDP’s Human Development Report every year since 1990, combining life expectancy, schooling and income per head — the measure conceived by Mahbub ul Haq with Amartya Sen. The World Bank publishes the Logistics Performance Index (and, until 2021, Ease of Doing Business); the WEF publishes the Global Gender Gap and Competitiveness reports; the IMF publishes the World Economic Outlook, which is a forecast, not an index.
India is a full member of all of the following EXCEPT:
1. The G20
2. BRICS
3. ASEAN
4. The Shanghai Cooperation Organisation
Show answer
Answer: C — ASEAN
India is a dialogue partner of ASEAN and has a free-trade agreement with it, but ASEAN’s ten members are all South-East Asian states and India is not one of them. India is a founding member of the G20 and of BRICS, and became a full member of the SCO in 2017. "Member or partner" is the trap this whole topic is built on, and ASEAN is the body it is most often set on.
The World Trade Organization came into being in 1995 as the successor to:
1. The International Trade Organization
2. The General Agreement on Tariffs and Trade (GATT)
3. The Bretton Woods Agreement
4. The Doha Development Agenda
Show answer
Answer: B — The General Agreement on Tariffs and Trade (GATT)
The GATT of 1947 was an agreement, not an organisation, and it governed trade in goods for nearly fifty years until the Uruguay Round produced the WTO on 1 January 1995, based in Geneva and covering services and intellectual property as well. The International Trade Organization (option A) was proposed in the 1940s and never came into being. Bretton Woods (1944) created the IMF and the World Bank, not a trade body. The Doha Round (2001) is a negotiation under the WTO, and one that never concluded.