Which of the following can lead to a depreciation of a country's currency?

A higher inflation rate in a country generally weakens its currency relative to others. When inflation rises, the purchasing power of the currency declines, making domestic goods and services more expensive compared to those from other countries. As a result, exports may decrease since foreign consumers find them costlier, while imports become more attractive to domestic consumers because they are relatively cheaper. This increase in demand for foreign currencies to purchase imports and the corresponding decrease in demand for the domestic currency can lead to its depreciation in the foreign exchange market.

In contrast, higher interest rates tend to attract foreign investment, which can lead to appreciation of the currency, while growth in GDP often suggests a stronger economy and can similarly lead to currency appreciation. A reduction in government borrowing might stabilize the country's economy, contributing to a stronger currency. Thus, the increased inflation rate is the primary factor that will likely cause depreciation of the country's currency.