General Studies · Logical Reasoning

Directions: A passage is given followed by two assumptions. You have to consider the statements to be true even if they seem to be at variance from commonly known facts. You have to decide which of the given assumption(s) is/are definitely drawn from the passage. Passage: The Reserve Bank of India's inter-departmental group has submitted its report on internationalisation of the Rupee, a process that involves the use of rupee for cross-border transactions. The report defines internationalisation of a currency as a steady shift towards full capital account convertibility to make it freely convertible for international financial transactions. The factors aiding the emergence of the rupee as an international currency are the geopolitical developments and the slow global shift to a multipolar international monetary and financial system. Assumptions: I. It can increase the volatility in money and exchange markets. II. It can reduce the cost of holding foreign reserves by the RBI.