"Decrease in value of domestic currency in terms of foreign currency by RBI"
What does the above statement indicate?
Answer & explanation
Correct answer: option 3
The correct answer is option 3: Devaluation of domestic currency
Decrease in value of domestic currency in terms of foreign currency by RBI is devaluation of domestic currency. Had the decrease happened due to market forces of demand and supply, it would have been termed as depreciation.