Q: 26 (IAS/2019)
question_subject:
Economics
question_exam:
IAS
stats:
0,170,147,59,33,55,170
keywords:
{'indian rupee': [0, 0, 0, 1], 'rupee': [1, 0, 1, 0], 'rbi': [1, 4, 2, 23], 'masala bonds': [0, 0, 0, 1], 'indian borrowers': [0, 0, 0, 1], 'expansionary monetary policy': [0, 0, 0, 1], 'easing conditions': [0, 0, 0, 1], 'government': [5, 0, 0, 1], 'exports': [0, 0, 2, 1], 'slide': [0, 0, 0, 1]}
Following an expansionary monetary policy is not the most likely measure the Government/RBI takes to stop the slide of the Indian rupee. An expansionary monetary policy, which involves increasing the money supply and reducing interest rates, can lead to further depreciation of the currency as it increases the supply of the currency in the market. Instead, 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 can help in stabilizing the currency.