economics medium True/False

Full Capital Account Convertibility allows residents to freely convert local financial assets into foreign financial assets without any regulatory restrictions.

  1. True
  2. False

Answer: True

Capital account convertibility pertains to the freedom to move capital across borders for investments (like buying foreign stocks or real estate). While India has full Current Account convertibility (for trade in goods/services), it maintains partial restrictions on the Capital Account to prevent volatile hot money flows from destabilizing the economy.

Topic Indian Economy - Concepts
Exam Relevance UPSC Prelims, Banking, SSC
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