Capital Account Convertibility of the Indian Rupee implies
Reviewed by Dalvoy
UPSC Civil Services preparation
- Athat the Indian Rupee can be exchanged by the authorised dealers for travel
- Bthat the Indian Rupee can be exchanged for any major currency for the purpose of trade in goods and services
- Cthat the Indian Rupee can be exchanged for any major currency for the purpose of trading financial assetsCorrect
- DNone of the above
Explanation
Capital Account Convertibility refers to the freedom to convert local financial assets into foreign financial assets and vice versa at market determined rates of exchange.
Current Account Convertibility relates to the freedom to exchange currency for the trade of goods and services. Capital Account Convertibility specifically deals with the movement of capital and the trading of financial assets like shares, bonds, and investment in properties.
Therefore, the accurate definition of Capital Account Convertibility is that the Indian Rupee can be exchanged for any major currency for the purpose of trading financial assets.
Related questions
More UPSC Prelims practice from the same subject and topic.
- Prelims 1998GS1economy
Which one of the following regions of the world supplies the maximum of our imported commodities (in terms of rupee value)?
- Prelims 1998GS1economy
The currency of the proposed European Monetary Union will be
- Prelims 1998GS1economy
Consider the following statements: The price of any currency in international market is decided by the I. World Bank. II. demand for goods/services provided by the country concerned. III. stability of…
- Prelims 1998GS1economy
The economist who was associated with the WTO draft document is
- Prelims 1998GS1economy
Which one of the following is the correct sequence of decreasing order of the given currencies in terms of their value in Indian Rupees?
- Prelims 1998GS1economy
Some time back, the Government of India, decided to delicense ‘white goods’ industry. ‘White goods’ include