Question : According to LERMS policy, what percentage of foreign exchange earnings was required to be exchanged at the official exchange rate as determined by the RBI?
Option 1: 20%
Option 2: 60%
Option 3: 30%
Option 4: 40%
Correct Answer: 40%
Solution : The correct option is 40%.
The Liberalized Exchange Rate Management System (LERMS) was a policy introduced by the Reserve Bank of India (RBI) in 1992. LERMS aimed to move towards a more market-determined exchange rate system while still retaining some controls. Under this system, 40 per cent of export and inward remittance revenues were acquired by the Reserve Bank of India (RBI) at the official exchange rate for official usage.
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