McqMate
| Q. |
Full convertibility of a rupeee means - |
| A. | purchase of foreign exchange for rupees freely |
| B. | payment for imports in terms of ruppes |
| C. | repayment of loans in terms of rupees |
| D. | determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply |
| Answer» D. determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply | |
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Explanation: The full convertibility of the Indian currency means that the rupee would be made freely exchangeable into other currencies and vice versa. The rupee was made partially convertible in 1994. Currently, it can be changed freely into foreign currency for business and trade expenses but not freely for activities like acquiring overseas assets. Full converted of the currency means the local currency can be exchanged to foreign currency without any governmental control. Presently, the issue ofcapital account convertibility is in the discussion stage. |
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