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Question

Read the passage and answer the questions that follow. The rupee is yet again facing renewed pressure, along with major peers, as the dollar continues to strengthen in the wake of the Federal Reserve’s latest jumbo 75 basis points interest rate increase and the U.S. central bank’s unequivocal message that it remains squarely focused on taming inflation. The Indian currency weakened past the 81-mark against the dollar for the first time ever in Friday’s intraday trade, before ending the week at a new record closing low. The rupee’s slide was softened by the Reserve Bank of India’s intervention to smoothen volatility; the cumulative impact of such interventions over the 12 months through September 16 have shrunk the RBI’s war chest of foreign exchange reserves by almost $94 billion to $545.65 billion. The fact that the rupee is not alone in depreciating against the dollar can be of little comfort to Indian companies reliant on imports of raw materials or services for the smooth functioning of their businesses.

According to the author rupee is not the only currency that is losing its value against dollar. How does this fact affect India?

A It helps keep up the morale, as India still has a chance to make a complete recovery from the depreciating prices. Correct Answer Incorrect Answer
B This helps companies that are involved in export and import to reap maximum benefits in a small amount of time. Correct Answer Incorrect Answer
C This fact does not help India at all, as Indian companies are facing setbacks in foreign trade. Correct Answer Incorrect Answer
D It is a matter of comfort for India and Indian MNCs. Correct Answer Incorrect Answer
E India will help India to take advantage of the trade with USA Correct Answer Incorrect Answer

Solution

In the passage, it is stated that “The fact that the rupee is not alone in depreciating against the dollar can be of little comfort to Indian companies reliant on imports of raw materials or services for the smooth functioning of their businesses.”

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