What does one mean by partial convertibility of the Indian Rupee?

Economics Dec 15, 2020

Expert Solution

Partial convertibility is a process that allows the conversion of the domestic currency in terms of the foreign currency for restricted purposes. There are restrictions on the transactions that are made in the capital account in India. Partial convertibility was introduced in India in March 1992. Its main aim is to reduce the prices of the essential goods and make the foreign exchange available at lower prices. It is also referred to as a dual exchange system.

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