{"id":1952,"date":"2024-03-30T14:14:22","date_gmt":"2024-03-30T08:44:22","guid":{"rendered":"https:\/\/lotusarise.com\/qna\/?p=1952"},"modified":"2024-04-03T07:07:59","modified_gmt":"2024-04-03T01:37:59","slug":"q-convertibility-of-rupee-implies","status":"publish","type":"post","link":"https:\/\/lotusarise.com\/qna\/upsc\/q-convertibility-of-rupee-implies","title":{"rendered":"Q.\u00a0Convertibility of rupee implies:"},"content":{"rendered":"\n<ul class=\"mcq wp-block-list\">\n<li>being able to convert rupee notes into gold<\/li>\n\n\n\n<li>allowing the value of rupee to be fixed by market forces<\/li>\n\n\n\n<li>freely permitting the conversion of rupee to other currencies and vice versa<\/li>\n\n\n\n<li>developing an international market for currencies in India<\/li>\n<\/ul>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\"><strong>Answer:<\/strong>&nbsp;<strong>(c) freely permitting the conversion of rupee to other currencies and vice versa<\/strong><\/p>\n<\/blockquote>\n\n\n\n<h5 class=\"wp-block-heading\" id=\"notes-hd-6607c628e117d\">Notes:<\/h5>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Convertibility of rupee means&nbsp;<strong>freely permitting the conversion of rupee to other currencies and vice versa.<\/strong><\/li>\n\n\n\n<li><strong>Indian currency is fully convertible in the Current Account<\/strong>\u00a0and\u00a0<strong>partially convertible in the Capital Account.<\/strong>\n<ul class=\"wp-block-list\">\n<li>Current Account convertibility means freedom to convert domestic currency into foreign currency and vice-versa,&nbsp;<strong>for trade in goods and services<\/strong>.<\/li>\n\n\n\n<li>On the other hand, Capital Account convertibility means freedom of currency conversion related to<strong>&nbsp;capital inflows and outflows<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h5 class=\"wp-block-heading\" id=\"convertibility-of-currency\">Convertibility of Currency<\/h5>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Prior to the First World War the whole world was having&nbsp;<strong>gold standard<\/strong>&nbsp;under which the currency in circulation was allowed to get converted either in gold or other currencies based on the gold standard.&nbsp;<\/li>\n\n\n\n<li>But after the&nbsp;<strong>failure of Bretton woods system in 1971 this system changed<\/strong>. Presently convertibility of money implies a system where a&nbsp;<strong>country\u2019s currency becomes convertible in foreign exchange and vice versa.<\/strong><\/li>\n\n\n\n<li>After the collapse of Breton Woods\u2019s system in 1971, the&nbsp;<strong>various countries switched over to the floating foreign exchange rate system<\/strong>. Under the floating or flexible exchange rate system, exchange rates between different national currencies are allowed to be determined through market demand for and supply of the same.<\/li>\n\n\n\n<li><strong>Since 1994, Indian rupee has been made fully convertible in current account transactions.<\/strong><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Answer:&nbsp;(c) freely permitting the conversion of rupee to other currencies and vice versa Notes: Convertibility of Currency<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[1,3],"tags":[38],"years":[58],"class_list":["post-1952","post","type-post","status-publish","format-standard","hentry","category-upsc","category-prelims","tag-indian-economy","years-58"],"acf":[],"taxonomy_info":{"category":[{"value":1,"label":"UPSC"},{"value":3,"label":"Prelims"}],"post_tag":[{"value":38,"label":"Indian Economy"}],"years":[{"value":58,"label":"2015"}]},"featured_image_src_large":false,"author_info":{"display_name":"LotusArise","author_link":"https:\/\/lotusarise.com\/qna\/author\/team-lotusarise"},"comment_info":0,"category_info":[{"term_id":1,"name":"UPSC","slug":"upsc","term_group":0,"term_taxonomy_id":1,"taxonomy":"category","description":"","parent":0,"count":1269,"filter":"raw","cat_ID":1,"category_count":1269,"category_description":"","cat_name":"UPSC","category_nicename":"upsc","category_parent":0},{"term_id":3,"name":"Prelims","slug":"prelims","term_group":0,"term_taxonomy_id":3,"taxonomy":"category","description":"","parent":1,"count":1251,"filter":"raw","cat_ID":3,"category_count":1251,"category_description":"","cat_name":"Prelims","category_nicename":"prelims","category_parent":1}],"tag_info":[{"term_id":38,"name":"Indian Economy","slug":"indian-economy","term_group":0,"term_taxonomy_id":38,"taxonomy":"post_tag","description":"","parent":0,"count":225,"filter":"raw"}],"_links":{"self":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/1952","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/comments?post=1952"}],"version-history":[{"count":0,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/posts\/1952\/revisions"}],"wp:attachment":[{"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/media?parent=1952"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/categories?post=1952"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/tags?post=1952"},{"taxonomy":"years","embeddable":true,"href":"https:\/\/lotusarise.com\/qna\/wp-json\/wp\/v2\/years?post=1952"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}