Civil Services Punjab State Civil Services CCE 2025 General Knowledge Economy External Sector and Currency Exchange rate
Consider the following statements about the possible effects of a US Federal Reserve rate cut:
1. India becomes more attractive for currency carry trade due to increased interest rate differentials.
2. A rate cut by the US Fed makes Indian exports less competitive in global markets.
3. Lower interest rates in the US can improve foreign investor enthusiasm for emerging markets like India.
How many of the above statements are correct?
1
Only one
2
Only two
3
All three
4
None