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In which of the following years the Indian Rupee was devalued for the second time ?
1. 1971
2. 1961
3. 1997
4. 1966

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Correct Answer - Option 4 : 1966

The correct answer is 1966.

  • Reserve Bank of India issues currency notes in India.
  • Indian rupee became an independent currency with the establishment of RBI in 1935.
  • Reserve Bank of India issues all currency notes above one rupee.
  • Indian Rupee was devalued in three instances but four times.
  • Indian Rupee was devalued for the first time in 1949.

 

  • Indian Rupee was devalued for the second time in 1966.
    • India’s war with Pakistan in late 1965 played a key role in the 1996 devaluation.
    • It was the result of the first major financial crisis the government faced.
    • Inflation had caused Indian prices to become much higher than world prices at the pre-devaluation exchange rate.
    • There was foreign pressure on India to reform its economy.
  • Indian Rupee was devalued for the third time in 1991.
    • The devaluation procedure in 1991 was carried out in two steps on July 1 and July 3.
    • The year 1991 is often cited as the year of economic reform in India.

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