Rupee Convertibility Economics

Convertibility of a currency refers to the ability to freely convert that currency into other currencies without restrictions or controls by the government. Full convertibility of the Indian rupee on the current account was adopted in 1991-1992 as part of economic liberalization reforms. Option (a) is historically outdated—the gold standard is no longer used. Option (b) relates to floating exchange rates but is not what convertibility means specifically. Option (d) describes the development of forex markets, not convertibility itself. Convertibility specifically means freedom to exchange one currency for another without state restrictions. > Rupee Convertibility = Free exchange for other currencies without government restrictions. Current account convertibility achieved in 1992. Answer: c.