Which of the following statements highlights an example of currency devaluation?

$1 is equal to ₹25, which was earlier worth ₹20.

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$1 is equal to ₹20, which was earlier worth ₹25.

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$1 dollar is equal to ₹20, which has remained unchanged.

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$1 dollar has depreciated to ₹10, which was earlier worth ₹15.

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Solution

The correct option is A $1 is equal to ₹25, which was earlier worth ₹20.
Devaluation refers to the deliberate downward adjustment of a country's currency value. In case of India, if the government reduces the value of the Indian rupee against a foreign currency like dollar, then we can call it devaluation.

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Similar questions

Q17. Consider the following statements about Currency Wars:

1. A currency war refers to a situation where a number of nations seek to deliberately depreciate the value of their domestic currencies.

2. Currency wars are also known as competitive devaluations.

Which of the above statements are correct?

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