Q. “Local Currency Settlement System” was seen in the news recently, is associated with –

[A] Facilitating cross-border transactions between two countries by allowing the use of their respective domestic currencies.

[B] Strengthening the monetary policy tools employed by the Reserve Bank of India (RBI).

[C] Reducing the quantity of US dollars held in the foreign exchange reserves

[D] Establishing a strong and effective arbitration resolution mechanism within India.

Answer: A
Notes:

Explanation – The Local Currency Settlement System (LCSS) is a framework that facilitates cross-border transactions between two nations, allowing the transactions to be conducted using their respective domestic currencies. Recently, India and the UAE have planned to come up with such system.

Source: ForumIAS

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