The exchange rate between the Indian rupee (INR) and the

Q: Answer-The exchange rate between the Indian rupee (INR) and the US dollar (USD) has been fluctuating signif...

Increasing taxes on imported goods is a fiscal policy measure, not a tool for direct intervention in the foreign exchange market. The RBI primarily uses monetary policy tools and direct market interventions to manage the exchange rate.

US dollar (USD) has been fluctuating significantly due to global economic uncertainties and changes in investor sentiment. The Reserve Bank of India (RBI) is closely monitoring the situation and may intervene in the foreign exchange market to stabilize the rupee. Which of the following is NOT a tool that the RBI can use to intervene in the foreign exchange market?

A Buying or selling US dollars in the market.

B Changing the repo rate.

C Imposing capital controls on foreign exchange transactions.

D Increasing taxes on imported goods.

E All of the above are tools that the RBI can use.

Practice Next

More Financial Management Questions

Which technological innovation trAns: forming modern agriculture by enabling precision farming?
Identify the wrong sequence
Breakeven point is determined by
Which one of the following is an animal-origin insecticide?
What is the potential consequence of over irrigation?
What is the primary function of chlorophyll in Plants?
On addition of HCl in milk, if the color changes to red, it indicates the milk is adulterated with _____
Which of the following rhizobium stains is useful for Biological Nitrogen Fixation in Alfalfa?
___________ is a permit or certificate allowing the holder to emit carbon dioxide or other greenhouse gases.
Gundhi bug, a pest of rice attacks the plant in which stage?

The exchange rate between the Indian rupee (INR) and the

Solution