Question : The liberalization of the external sector in 1991 led to the devaluation of which currency?
Option 1: Indian Rupee
Option 2: US Dollar
Option 3: Euro
Option 4: Japanese Yen
Answer (1)
25th Jan, 2024
Correct Answer: Indian Rupee
Solution : The correct answer is (a) Indian Rupee.
As part of the economic reforms in 1991, the Indian government introduced measures to liberalize the external sector, including allowing greater flexibility in exchange rates. This led to the devaluation of the Indian Rupee, meaning that its value decreased in relation to other currencies. Devaluation aimed to make Indian goods and services more competitive in international markets and promote exports.
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