The BOP crisis of 1991 involved a shortage of?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is Option 3 i.e. Foreign exchange.
The 1991 Balance of Payments (BOP) crisis was primarily a financial emergency characterized by a severe depletion of India’s foreign currency reserves. Due to high oil prices and excessive external debt, the reserves fell so low that India could barely pay for two weeks of essential imports.
This shortage forced the government to bridge the gap by pledging gold and seeking an emergency loan from the IMF.