Increase in price of foreign currency in terms of domestic currency is due to :

Increase in import of goods.

The correct answer is option (2) : Increase in import of goods.

Increase in the price of foreign currency in terms of domestic currency (depreciation) is typically due to an increase in demand for foreign currency relative to the supply of domestic currency. Increase in import of goods will lead to a depreciation of the domestic currency because when a country imports more goods, it generally requires more foreign currency to pay for those imports.

An increase in the price of foreign currency in terms of domestic currency (i.e., an appreciation of the foreign currency) can be due to a variety of factors. Among the options you've provided:

1. Increase in export of goods: This is generally associated with an increase in demand for the domestic currency, not an increase in the demand of foreign currency. When a country exports more goods, it typically earns foreign currency, which can lead to an appreciation of the domestic currency.

3. Increase in FDI by non-residents in our country: This can potentially increase the demand for the domestic currency, which may lead to an appreciation of the domestic currency. When foreign investors invest in a country, they often need the domestic currency to make those investments.

4. Increase in international borrowing by the country: When a country borrows from abroad, it receives foreign currency. If this borrowing is significant, it can increase the supply of foreign currency in the domestic market, potentially leading to a temporary appreciation of the domestic currency.