SSC MTS EXAM

Detailed explanation-1: -The lowering of the rupee value in terms of foreign exchange is called rupee devaluation. It is done by the government. The Indian government depreciated the rupee by 18–19% in July 1991.

Detailed explanation-2: -In 1991, the Indian rupee was devalued in two steps, first on 1st July and again on 3rd July.

Detailed explanation-3: -India had to go for a devaluation of the Indian rupee because India was facing a massive economic crisis. India had very limited foreign reserves to carry out international trade for a few days. India was facing a balance of payment crisis.

Detailed explanation-4: -event began with a slide in the value of the rupee leading up to mid-1991. The authorities at the Reserve Bank of India slowed the decline in value by expending international reserves. With reserves nearly depleted, however, the exchange rate was devalued sharply on July 1 and July 3 against major foreign currencies.