Which of the following actions can help in reducing the current account deficit of a country?
- Increasing import duty
- Devaluation of the domestic currency against foreign currencies
- Increase in foreign portfolio investment
- Increase in remittances
Select the correct option from codes given below:
Foreign portfolio investment forms a part of capital account and not current account.
Increasing import duty will make imports costly, and hence will reduce imports.Devaluation of currency will boost export and will reduce imports.Also; devaluation of currency will increase the remittances to country.
BoP on Current Account= (Export-Import) + (Invisible Payments – Invisible Receipt)
This question is a part of GKToday's Integrated IAS General Studies Module