Which one of the following is not the most likely measure the Government RBI takes to stop the slide...........

Economic Affairs Balance of Payments

Which one of the following is not the most likely measure the Government/RBI takes to stop the slide of Indian rupee?

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UPSC CSP Previous Year Paper (2019)

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Curbing imports of non-essential goods-and promoting exports

Encouraging Indian borrowers to issue rupee denominated Masala Bonds

Easing conditions relating to external commercial borrowing

Following an expansionary monetary policy

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Explanation:

Curbing the imports will help by reducing the Current account deficit and thus the depreciation of rupee.

Encouraging Indian borrowers to issue rupee denominated Masala Bonds will help by reducing the demand of dollars in loan-repayment.

Easing conditions relating to external commercial borrowing will help by increasing the inflow of dollars and other currencies.

An expansionary monetary policy may lead to lower interest rates and thus flight of foreign capital from India (which would get better returns abroad). Also, such a policy may fuel inflation and higher imports through higher government spending and further cause slide of rupee. Therefore, D is the answer.