UPSC CSE Prelims
Question 65
Consider the following statements in respect of the digital rupee :
- It is a sovereign currency issued by the Reserve Bank of India (RBI) in alignment with its monetary policy.
- It appears as a liability on the RBI's balance sheet.
- It is insured against inflation by its very design.
- It is freely convertible against commercial bank money and cash.
Which of the statements given above are correct ?
View correct answer and explanation
Correct answer: D
Correct Option: D (1, 2 and 4)
Explanation: The digital rupee is RBI-issued central-bank money, appears on RBI’s balance sheet and can be exchanged at par with cash or bank deposits; it is not automatically inflation-proof.
Statement / Pair / Item-wise Analysis:
1. Correct/True - Retail CBDC is sovereign RBI currency.
2. Correct/True - It is a liability of the central bank.
3. Incorrect/False - Like physical rupees, digital rupees can lose purchasing power through inflation.
4. Correct/True - RBI’s design permits conversion at par with cash/bank money.
Option-wise Analysis:
A. Incorrect-omits correct item 4 (RBI’s design permits conversion at par with cash/bank money.).
B. Incorrect-incorrectly includes 3 (Like physical rupees, digital rupees can lose purchasing power through inflation.); omits correct item 2 (It is a liability of the central bank.); omits correct item 4 (RBI’s design permits conversion at par with cash/bank money.).
C. Incorrect-omits correct item 1 (Retail CBDC is sovereign RBI currency.).
D. Correct-includes precisely the true/correct statements or pairs identified above.