Q. RBI has released a report titled Report on Currency and Finance: Towards a Greener Cleaner India. With reference to this report, consider the following statements:
1.Amongst the BRICS nations and the major advanced economies (AEs), Brazil is the most vulnerable to physical risks arising from climate change.
2.The pressure of currency depreciation in countries frequently affected by climate disasters can cause financial instability, higher import costs, and negative terms of trade.
3.Climate-induced uncertainty can make households save more for precautionary purposes, bringing down the real equilibrium interest rate.
Which of the statements given above are correct?

[A] 1 and 2 only

[B] 2 and 3 only

[C] 1 and 3 only

[D] 1, 2 and 3

Answer: B
Notes:

Explanation –

Statement 1 is incorrect. According to the report, amongst the BRICS nations and the major advanced economies (AEs), India is the most vulnerable to physical risks arising from climate change.

Statement 2 and 3 are correct. The pressure of currency depreciation in countries frequently affected by climate disasters can cause financial instability, higher import costs, and negative terms of trade. Climate-induced uncertainty can make households save more for precautionary purposes, bringing down the real equilibrium interest rate.

Source: ForumIAS