Currency Convertibility

Currency convertibility, as an aspect of a country's exchange rate policy, refers to the ease with which domestic currency can be traded for foreign currency, for a particular usage and at a given exchange rate. Current account convertibility was introduced in India in August 1994 with the acceptance of the obligations under Article VIII of the IMF's Articles of Agreement. This drastic measure contributed significantly to boost India's exports. Presently, there is almost full convertibility on the current account and partial convertibility on the capital account. This book explains and examines various aspects of currency convertibility risks and their management. It discusses convertibility experiences of a number of Latin American countries (Argentina, Brazil, Mexico, Venezuela) and selected countries of East and South-East Asia (Thailand, Indonesia, Malaysia). The experiences of these countries, in a comparative perspective, will help to understand the requisites of a regime of sustainable convertibility.