Convertibility of rupee implies:
✓ Correct answer: c) freely permitting the conversion of rupee to other currencies and vice versa.
ExplanationConvertibility of a currency means that it can be freely exchanged for other currencies and vice versa with- out restrictions.It essentially means that there are no lim- itations on the flow of the currency in and out of the coun- try.When a currency is convertible, individuals, businesses, and investors can easily convert it to other currencies to make pay- ments abroad, invest in foreign assets, or engage in other inter- national transactions.Similarly, they can convert foreign curren- cies back into the domestic currency.India has current account convertibility, meaning that there are generally no restrictions on converting rupees for trade-related purposes.There are some regulations on capital account transactions, although these have been progressively liberalized over time.269
Practice more Economy PYQs
Attempt a free 10-question quiz or browse the full Economy previous-year-question bank with instant answers and explanations.
📈 Economy PYQs →