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.

Consider the following statements in respect of the digital rupee:

1. It is a sovereign currency issued by the Reserve Bank of India (RBI) in alignment with its monetary policy.
2. It appears as a liability on the RBI’s balance sheet.
3. It is insured against inflation by its very design.
4. It is freely convertible against commercial bank money and cash.

Which of the statements given above are correct?

(a) 1 and 2 only
(b) 1 and 3 only
(c) 2 and 4 only
(d) 1, 2 and 4

Correct Answer: (d) 1, 2 and 4

Explanation:

• Statement 1 is correct. The digital rupee is a sovereign currency issued by the RBI.
• Statement 2 is correct. It appears as a liability on the RBI’s balance sheet.
• Statement 3 is incorrect. The digital rupee, like any currency, is not inherently insured against inflation.
• Statement 4 is correct. It is freely convertible against commercial bank money and cash.
• Possible Sources: RBI guidelines and monetary policy documents.