{"id":89690,"date":"2025-06-01T10:10:36","date_gmt":"2025-06-01T10:10:36","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=89690"},"modified":"2025-06-01T10:10:36","modified_gmt":"2025-06-01T10:10:36","slug":"which-of-the-following-statements-is-correct-with-respect-to-the-conve","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-statements-is-correct-with-respect-to-the-conve\/","title":{"rendered":"Which of the following statements is correct with respect to the conve"},"content":{"rendered":"

Which of the following statements is correct with respect to the convertibility of Indian rupee?<\/p>\n

[amp_mcq option1=”It is convertible on capital account” option2=”It is convertible on current account” option3=”It is convertible both on current and capital account” option4=”None of the above” correct=”option2″]<\/p>\n

\n
\n
This question was previously asked in<\/div>\n
UPSC CAPF – 2013<\/div>\n<\/div>\n
Download PDF<\/a>Attempt Online<\/a><\/div>\n<\/div>\n
\nThe correct option is B.
\n<\/section>\n
\n– Convertibility of a currency refers to the freedom with which it can be exchanged for other currencies.
\n– Convertibility is typically discussed in two parts: current account convertibility and capital account convertibility.
\n– Current account convertibility allows individuals and businesses to freely convert domestic currency into foreign currency for current account transactions, which include trade in goods and services (exports and imports), remittances, interest payments, and dividends. The Indian Rupee is fully convertible on the current account.
\n– Capital account convertibility allows individuals and businesses to freely convert domestic currency into foreign currency for capital account transactions, which involve cross-border movement of capital, such as investments (FDI, FPI), loans, and acquisition of assets. The Indian Rupee is *not* fully convertible on the capital account; there are restrictions and regulations imposed by the RBI on various capital transactions. India has moved towards greater capital account convertibility but has not achieved full convertibility due to concerns about potential financial instability.
\n<\/section>\n
\nIndia achieved full current account convertibility in 1994. The journey towards capital account convertibility has been cautious and gradual, guided by various committees (like the Tarapore Committee). The level of capital account convertibility is often described as ‘partial’ or ‘limited’.
\n<\/section>\n","protected":false},"excerpt":{"rendered":"

Which of the following statements is correct with respect to the convertibility of Indian rupee? [amp_mcq option1=”It is convertible on capital account” option2=”It is convertible on current account” option3=”It is convertible both on current and capital account” option4=”None of the above” correct=”option2″] This question was previously asked in UPSC CAPF – 2013 Download PDFAttempt Online … <\/p>\n

Detailed SolutionWhich of the following statements is correct with respect to the conve<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1085],"tags":[1467,1226],"class_list":["post-89690","post","type-post","status-publish","format-standard","hentry","category-upsc-capf","tag-1467","tag-external-sector-of-economy","no-featured-image-padding"],"yoast_head":"\nWhich of the following statements is correct with respect to the conve<\/title>\n<meta name=\"description\" content=\"The correct option is B. - Convertibility of a currency refers to the freedom with which it can be exchanged for other currencies. - Convertibility is typically discussed in two parts: current account convertibility and capital account convertibility. - Current account convertibility allows individuals and businesses to freely convert domestic currency into foreign currency for current account transactions, which include trade in goods and services (exports and imports), remittances, interest payments, and dividends. The Indian Rupee is fully convertible on the current account. - Capital account convertibility allows individuals and businesses to freely convert domestic currency into foreign currency for capital account transactions, which involve cross-border movement of capital, such as investments (FDI, FPI), loans, and acquisition of assets. The Indian Rupee is *not* fully convertible on the capital account; there are restrictions and regulations imposed by the RBI on various capital transactions. India has moved towards greater capital account convertibility but has not achieved full convertibility due to concerns about potential financial instability.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-statements-is-correct-with-respect-to-the-conve\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Which of the following statements is correct with respect to the conve\" \/>\n<meta property=\"og:description\" content=\"The correct option is B. - Convertibility of a currency refers to the freedom with which it can be exchanged for other currencies. - Convertibility is typically discussed in two parts: current account convertibility and capital account convertibility. - Current account convertibility allows individuals and businesses to freely convert domestic currency into foreign currency for current account transactions, which include trade in goods and services (exports and imports), remittances, interest payments, and dividends. The Indian Rupee is fully convertible on the current account. - Capital account convertibility allows individuals and businesses to freely convert domestic currency into foreign currency for capital account transactions, which involve cross-border movement of capital, such as investments (FDI, FPI), loans, and acquisition of assets. The Indian Rupee is *not* fully convertible on the capital account; there are restrictions and regulations imposed by the RBI on various capital transactions. India has moved towards greater capital account convertibility but has not achieved full convertibility due to concerns about potential financial instability.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-statements-is-correct-with-respect-to-the-conve\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-01T10:10:36+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Which of the following statements is correct with respect to the conve","description":"The correct option is B. - Convertibility of a currency refers to the freedom with which it can be exchanged for other currencies. - Convertibility is typically discussed in two parts: current account convertibility and capital account convertibility. - Current account convertibility allows individuals and businesses to freely convert domestic currency into foreign currency for current account transactions, which include trade in goods and services (exports and imports), remittances, interest payments, and dividends. The Indian Rupee is fully convertible on the current account. - Capital account convertibility allows individuals and businesses to freely convert domestic currency into foreign currency for capital account transactions, which involve cross-border movement of capital, such as investments (FDI, FPI), loans, and acquisition of assets. The Indian Rupee is *not* fully convertible on the capital account; there are restrictions and regulations imposed by the RBI on various capital transactions. India has moved towards greater capital account convertibility but has not achieved full convertibility due to concerns about potential financial instability.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-statements-is-correct-with-respect-to-the-conve\/","og_locale":"en_US","og_type":"article","og_title":"Which of the following statements is correct with respect to the conve","og_description":"The correct option is B. - Convertibility of a currency refers to the freedom with which it can be exchanged for other currencies. - Convertibility is typically discussed in two parts: current account convertibility and capital account convertibility. - Current account convertibility allows individuals and businesses to freely convert domestic currency into foreign currency for current account transactions, which include trade in goods and services (exports and imports), remittances, interest payments, and dividends. 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