UPSC Exam  >  UPSC Questions  >  Consider the following statements and identif... Start Learning for Free
Consider the following statements and identify the right ones.
i. India adopted LERMS in 1992
ii. In 1993, dual exchange rate system was replaced by a unified floating exchange rate.
  • a)
    i only
  • b)
    ii only
  • c)
    both
  • d)
    e.a. i onlyb. ii onlyc. both
Correct answer is option 'C'. Can you explain this answer?
Verified Answer
Consider the following statements and identify the right ones.i.India ...
Liberalized Exchange Rate Management System was a dual exchange rate system in which 40% of forex earnings were converted at official exchange rate and 60% at market determined exchange rate.
This question is part of UPSC exam. View all UPSC courses
Most Upvoted Answer
Consider the following statements and identify the right ones.i.India ...
India's Exchange Rate System:

• India adopted LERMS (Liberalized Exchange Rate Management System) in 1992.
• LERMS was a system where the exchange rate was fixed for important imports like oil, fertilizers, etc. while the rest of the exchange rate was market-determined.
• In 1993, LERMS was replaced by a unified floating exchange rate system.

Dual Exchange Rate System:

• Dual exchange rate system refers to a system where there are two different exchange rates for a currency.
• India had a dual exchange rate system before LERMS. The official exchange rate was fixed, while there was a market-determined exchange rate for the rest of the transactions.
• This system was replaced by LERMS in 1992.

Unified Floating Exchange Rate System:

• A unified floating exchange rate system refers to a system where the exchange rate is determined by the market forces of demand and supply.
• India adopted a unified floating exchange rate system in 1993, after the LERMS system was replaced.
• Under this system, the exchange rate is determined by the market forces, and the Reserve Bank of India intervenes only to control excessive volatility in the exchange rate.

Correct Answer:

• Statement i is correct. India adopted LERMS in 1992.
• Statement ii is also correct. In 1993, dual exchange rate system was replaced by a unified floating exchange rate.
• Therefore, the correct option is C, both statements are correct.
Explore Courses for UPSC exam

Similar UPSC Doubts

Top Courses for UPSC

Consider the following statements and identify the right ones.i.India adopted LERMS in 1992ii. In 1993, dual exchange rate system was replaced by a unified floating exchange rate.a)i onlyb)ii onlyc)bothd)e.a. i onlyb. ii onlyc. bothCorrect answer is option 'C'. Can you explain this answer?
Question Description
Consider the following statements and identify the right ones.i.India adopted LERMS in 1992ii. In 1993, dual exchange rate system was replaced by a unified floating exchange rate.a)i onlyb)ii onlyc)bothd)e.a. i onlyb. ii onlyc. bothCorrect answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements and identify the right ones.i.India adopted LERMS in 1992ii. In 1993, dual exchange rate system was replaced by a unified floating exchange rate.a)i onlyb)ii onlyc)bothd)e.a. i onlyb. ii onlyc. bothCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements and identify the right ones.i.India adopted LERMS in 1992ii. In 1993, dual exchange rate system was replaced by a unified floating exchange rate.a)i onlyb)ii onlyc)bothd)e.a. i onlyb. ii onlyc. bothCorrect answer is option 'C'. Can you explain this answer?.
Solutions for Consider the following statements and identify the right ones.i.India adopted LERMS in 1992ii. In 1993, dual exchange rate system was replaced by a unified floating exchange rate.a)i onlyb)ii onlyc)bothd)e.a. i onlyb. ii onlyc. bothCorrect answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for UPSC. Download more important topics, notes, lectures and mock test series for UPSC Exam by signing up for free.
Here you can find the meaning of Consider the following statements and identify the right ones.i.India adopted LERMS in 1992ii. In 1993, dual exchange rate system was replaced by a unified floating exchange rate.a)i onlyb)ii onlyc)bothd)e.a. i onlyb. ii onlyc. bothCorrect answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Consider the following statements and identify the right ones.i.India adopted LERMS in 1992ii. In 1993, dual exchange rate system was replaced by a unified floating exchange rate.a)i onlyb)ii onlyc)bothd)e.a. i onlyb. ii onlyc. bothCorrect answer is option 'C'. Can you explain this answer?, a detailed solution for Consider the following statements and identify the right ones.i.India adopted LERMS in 1992ii. In 1993, dual exchange rate system was replaced by a unified floating exchange rate.a)i onlyb)ii onlyc)bothd)e.a. i onlyb. ii onlyc. bothCorrect answer is option 'C'. Can you explain this answer? has been provided alongside types of Consider the following statements and identify the right ones.i.India adopted LERMS in 1992ii. In 1993, dual exchange rate system was replaced by a unified floating exchange rate.a)i onlyb)ii onlyc)bothd)e.a. i onlyb. ii onlyc. bothCorrect answer is option 'C'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Consider the following statements and identify the right ones.i.India adopted LERMS in 1992ii. In 1993, dual exchange rate system was replaced by a unified floating exchange rate.a)i onlyb)ii onlyc)bothd)e.a. i onlyb. ii onlyc. bothCorrect answer is option 'C'. Can you explain this answer? tests, examples and also practice UPSC tests.
Explore Courses for UPSC exam

Top Courses for UPSC

Explore Courses
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev