Question

Which of the following was one of the immediate causes of the depletion of India's foreign currency reserve in 1990?

• A. Lack of employment opportunities
• B. Lesser savings
• C. Imports became very expensive
• D. Poverty

Answer 1

The correct option is C Imports became very expensive

A series of economic policy failures led India’s economy into trouble. Additionally, the rising international oil prices made imports very expensive. India did not have sufficient money to support the imports of essential commodities for more than a few weeks. It resulted in a foreign currency crisis.