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.