One of the important goals of the economic liberalisation policy is to achieve full convertibility of the Indian rupee.
One of the important goals of the economic liberalisation policy is to achieve full convertibility of the Indian rupee. This is being advocated because:
(a) convertibility of the rupee will stabilize its exchange value against major currencies of the world
(b) it will attract more foreign capital inflow in India
(c) it will help to promote exports
(d) it will help India secure loans from the world financial markets at attractive terms
1 Answers
(a) The full convertibility of the Indian currency means that the rupee is freely exchangeable into other international currencies and vice versa. Also, this would mean that international investors can buy and sell Indian assets at will. After 1994, the rupee has been partially convertible which means that the currency is changed freely into foreign currency for business and trade expenses. But it cannot be converted freely for acquiring overseas assets. Experts feel full convertibility of rupee would facilitate growth and higher foreign investments.