Consider the following statements: Full convertibility of the rupee may mean 1. its free float with other international currencies. 2. its direct exchange with any other international currency at any prescribed place inside and outside the country. 3. it acts just like any other international currency. Which of these statements are correct?

Full convertibility of the rupee implies that it can be freely exchanged for foreign currencies without any regulatory restrictions. Statement 1 is correct because full convertibility allows the value of the rupee to be determined by market forces of demand and supply in the foreign exchange market, leading to a free float. Statement 2 is correct because it implies the legal right to convert the local currency into any foreign currency at market rates at any location, whether domestic or international, without needing government approval. Statement 3 is correct because once a currency is fully convertible, it attains the status of an international currency. It can be used globally for trade, investment, and as a reserve asset, functioning similarly to the US Dollar or the Euro. Since all three statements accurately describe the implications of full convertibility, the correct answer is D.