Question

Which one of the following is not the most likely measure the government/rbi takes to stop the slide of indian rupee? (prelims-2019)

(a) curbing imports of non-essential goods and promoting exports
(b) encouraging indian borrowers to issue rupee denominated masala bonds
(c) easing conditions relating to external commercial borrowing
(d) following an expansionary monetary policy

Answer 1

The most unlikely measure that the government/RBI would take to stop the slide of the Indian rupee is (d) following an expansionary monetary policy.

Step-by-step explanation:

The most unlikely measure that the government/RBI would take to stop the slide of the Indian rupee is (d) following an expansionary monetary policy.

Following an expansionary monetary policy, which involves lowering interest rates and increasing the money supply, can lead to depreciation of the currency. However, this measure is not often used because it may be in conflict with the country's monetary policy goals.

Instead, the government/RBI is more likely to focus on measures such as curbing imports of non-essential goods and promoting exports, encouraging Indian borrowers to issue rupee denominated masala bonds, and easing conditions relating to external commercial borrowing to address the slide of the Indian rupee.