Civil Services Punjab State Civil Services CCE 2025 General Knowledge Economy External Sector and Currency Exchange rate
Consider the following statements:
Statement–I: The Bank of Japan kept interest rates low for an extended period, even as other central banks raised rates in response to global inflation.
Statement–II: Low interest rates in Japan encouraged investors to borrow in yen and invest in higher-yielding assets abroad, a strategy known as the "carry trade".
Which one of the following is correct in respect of the above statements?
1
Both Statement–I and Statement–II are correct and Statement–II is the correct explanation for Statement–I
2
Both Statement–I and Statement–II are correct but Statement–II is not the correct explanation for Statement–I
3
Statement–I is correct but Statement–II is incorrect
4
Statement–I is incorrect but Statement–II is correct