Multiple choice

In 1991, why did India export gold to Bank of England, United Kingdom?

  1. To meet foreign exchange crisis

  2. To return the gold that India had borrowed from the UK

  3. To promote investments in British companies

  4. None of these
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A Correct answer
Explanation

In 1991, India faced its worst balance of payments crisis since independence, with foreign exchange reserves depleted to just 3 weeks of imports. The government pledged 47 tonnes of gold to the Bank of England to secure a $400 million loan. This emergency measure, which included airlifting gold in July 1991, helped avert default and triggered economic liberalization.

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