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Question
Indian currency was last devalued in _______.
Indian currency was last devalued in _______.
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Solution
The correct option is C 1991
In 1991, India still had a fixed exchange system, where the rupee was pegged to the value of a basket of currencies of major trading partners. India started having balance of payments problems since 1985, and by the end of 1990, it found itself in serious economic trouble. The government was close to default and its foreign exchange reserves had dried up to the point that India could barely finance three weeks’ worth of imports. As in 1966, India faced high inflation and large government budget deficits.This led the government to devalue the rupee. At the end of 1991, the Indian Rupee was devalued considerably.India devalued its rupee in 1966 and 1991.
In 1991, India still had a fixed exchange system, where the rupee was pegged to the value of a basket of currencies of major trading partners. India started having balance of payments problems since 1985, and by the end of 1990, it found itself in serious economic trouble. The government was close to default and its foreign exchange reserves had dried up to the point that India could barely finance three weeks’ worth of imports. As in 1966, India faced high inflation and large government budget deficits.This led the government to devalue the rupee. At the end of 1991, the Indian Rupee was devalued considerably.
India devalued its rupee in 1966 and 1991.
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