Full converted of the currency means the local currency can be exchanged to foreign currency without any governmental control. Presently, the issue of capital account convertibility is in the discussion stage. Capital Account convertibility means the freedom to convert domestic financial assets at market determined rates.
It can also imply conversion of overseas financial assets into domestic financial assets. Broadly stage it would mean freedom to firms and residents to freely by overseas assets such as equity, bonds property and acquire ownership of overseas firms besides free repatriation of proceeds by foreign investory.
The committee on capital account convertibility appointed in 1997 with Dr. Tarpoor as chairman. The committee had provided a roadmap for the economy to whereas most mental health programmes are move towards full convertibility, step by step, and the time frame was 1997-2000.
The committee had also laid down certain pre-conditions for implementing the reforms. But nothing much happened during that phase. One of the main problems an economy which has opted for a free float has to contend with is, the prospects of outflow of what is termed as speculative short term flows.