Indian rupee convertibility ‘will be in stages’

Indian rupee convertibility ‘will be in stages’
Updated 03 June 2015

Indian rupee convertibility ‘will be in stages’

Indian rupee convertibility ‘will be in stages’

MUMBAI: India could allow its currency to become fully convertible in about 5-10 years, Reserve Bank of India Governor Raghuram Rajan said in an interview published on financial newspaper Mint’s website.
But Rajan warned that openness would come in stages.
“When I look at what we need to get to full capital account convertibility, what it seems to me is that there are only two or three areas where we are less than fully convertible,” Rajan said in the interview.
“We have constantly been revising and reducing regulation. Even now, we are looking at all our market regulations to see if we really need some of the constraints and prohibitions and what we can do away with,” he said.
“The sequence would be to first reach macro stability and gain confidence (in) it. The next step would be to liberalize much more on certain fronts.”
India imposes restrictions on how much money its citizens and companies can invest abroad. Foreign investors investing in India can freely put cash into equities, but they cannot buy more than $80 billion of the country’s debt.
Rajan called in April for full convertibility in “a short number of years,” having first raised the prospect when he took office in 2013.