Q. With reference to the Fixed Currency Regime under the IMF, consider the following statements:
1.Under this regime, the exchange rate of a currency was fixed by the IMF against a basket of major world currencies.
2.Member countries were required to maintain the fixed exchange rate determined by the IMF, which could be revised periodically.
Which of the statements given above is/are correct?
Answer: C
Notes:
Explanation:
- The IMF regulated exchange rates by fixing them against a basket of major currencies (like USD, GBP, JPY, DM, and FFr).
- Countries were expected to maintain these fixed rates, with revisions made by the IMF as needed.
Source: Indian Economy (Ramesh Singh)
