Current account convertibility refers to the freedom of converting home currency into foreign currency with respect to transactions in current account.
Budget 1992 — 93 introduced Liberalized Exchange Rate Management System (LERMS).
o In this system, 60% of foreign exchange earnings are convertible at open market rate, and remaining 40% at RBI fixed rate.
In 1993-94, government introduced full convertibility in Trade account.
In 1994 – 95 budget, full convertibility in current account was introduced.
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