Which one of the following is not the most likely measure the Government/RBI takes to stop the slide of Indian rupee?

The correct answer is D. Expansionary monetary policy means cutting rates and pumping liquidity, which makes rupee assets less attractive and encourages capital to leave. That adds to depreciation pressure, so it cannot be a measure to stop the slide. The RBI did the opposite in 2018, raising the repo rate in June 2018 and tightening liquidity to defend the rupee.

Option A is a standard step. Curbing non-essential imports cuts dollar demand, and export promotion adds dollar supply. Option C is also a real measure: the RBI eased ECB norms in 2018, widening eligible borrowers and raising limits, to attract foreign borrowing. Option B works in the same direction. Masala bonds are rupee-denominated bonds issued abroad, so the currency risk shifts to foreign investors, and Indian borrowers raise foreign funds without taking on rupee-dollar risk. The government encouraged these to draw in foreign money.

Concept: exchange rate management and the balance of payments, including the trade-off between capital flows, monetary policy and the exchange rate. This links to GS-III economy and to Mains questions on currency volatility and capital flows.

Trap: aspirants pick B because any rupee-linked instrument sounds like rupee support, or they pick C without knowing the 2018 ECB easing. The real giveaway is that D works against currency defence.