Question

India faced the worst Balance of Payment (BOP) crisis in which of the following year?
1. 1985
2. 1986
3. 1991
4. 1982
5.

Answer 1

Correct Answer - Option 3 : 1991

The correct answer is ​1991.

• India faced the Balance of Payment crisis in 1991 due to a huge macroeconomic imbalance.
• The balance of Payment (BoP) Crisis is also called a currency crisis.
• It occurs when a nation is unable to pay for essential imports or service its external debt payments

• Balance of payments (BOP)-
  • The balance of payments (BOP) of a country is the record of all economic transactions between the residents of a country and the rest of the world in a particular period (over a quarter of a year or more commonly over a year).
  • Balance of Payment (BoP) of a country can be defined as a systematic statement of all economic transactions of a country with the rest of the world during a specific period usually one year.
  • It indicates whether the country has a surplus or a deficit in trade.
  • When exports exceed imports, there is a trade surplus and when imports exceed exports there is a trade deficit.