Correct Answer:
Option A —
It was devalued
The Devaluation of 1991
Devaluation is the deliberate downward adjustment of a country's currency value relative to another currency (usually the US Dollar).
The Action: On July 1 and July 3, 1991, the RBI devalued the Rupee by approximately 18-19% against major international currencies.
The Goal: 1. Boost Exports: A weaker Rupee made Indian goods cheaper for foreign buyers.
2. Discourage Imports: It made foreign goods more expensive for Indians, reducing the outflow of precious foreign exchange.
3. Capital Inflow: It encouraged Non-Resident Indians (NRIs) to send money back to India, as they would get more Rupees for their Dollars.
Answer verified by Quintessence Classes faculty — Karan Nagar, Srinagar.
