{"id":31125,"date":"2015-05-19T06:07:29","date_gmt":"2015-05-19T06:07:29","guid":{"rendered":"http:\/\/vskills.in\/certification\/blog\/?p=31125"},"modified":"2024-04-03T13:17:02","modified_gmt":"2024-04-03T07:47:02","slug":"capital-account-convertibility-2","status":"publish","type":"post","link":"https:\/\/www.vskills.in\/certification\/blog\/capital-account-convertibility-2\/","title":{"rendered":"Capital Account Convertibility by Kannammai Palaniappan"},"content":{"rendered":"<p style=\"text-align: center\"><a ref=\"magnificPopup\" href=\"http:\/\/vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/05\/Capital-account-convertibility.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-31130\" src=\"http:\/\/vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/05\/Capital-account-convertibility.jpg\" alt=\"Capital account convertibility\" width=\"210\" height=\"240\" \/><\/a><\/p>\n<p>Capital account and current account are two major components contributing to balance of payments. Current account represents regular trade transactions whereas capital account represents ownership of assets. Surplus in capital account represent inflow of money for domestic assets whereas deficit represent more of foreign asset ownership by domestic players.<\/p>\n<p>Current account includes imports and exports. Government of India has not implemented any cap for current account transactions. Current account transactions can happen smoothly without any Foreign exchange permission. Capital account transaction has been capped to a limit of $125000 and is under discussion to make modifications.<\/p>\n<p>Capital account convertibility is free conversion of local currency to foreign currency to acquire foreign assets at market price. This also applies to conversion of foreign currency to local currency.\u00a0 Capital account convertibility increases flexibility in international ownership. \u00a0As per present India\u2019s juncture, Modi attracts investments and is in a state of nature to pull India along with other global nations in terms of standards, ranking, economy, growth and still more. To push India along with other global concerns full capital account convertibility has to be implemented. But full capital account convertibility also brings in too many risks and challenges to be faced which is proved to be difficult with current Indian economy\u2019s stability.<\/p>\n<p>So, RBI has planned to increase capital account convertibility to a cap of $250000 which is a step towards full capital account convertibility. \u00a0This would liberalize foreign investors to certain extent, which will be favorable for attracting investments towards India. This also further helps in globalization by Indian companies and individuals as well. Capital account convertibility extension would open door for better opportunities.\u00a0\u00a0\u00a0\u00a0 RBI has planned to stabilize inflation, exchange rates in order to implement full capital account convertibility. This shows very clearly that GOI and RBI are moving forward with a positive synchronization. Hope their bonds bring in escalation.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Capital account and current account are two major components contributing to balance of payments. Current account represents regular trade transactions whereas capital account represents ownership of assets. Surplus in capital account represent inflow of money for domestic assets whereas deficit represent more of foreign asset ownership by domestic players. Current account includes imports and exports&#8230;.<\/p>\n","protected":false},"author":645,"featured_media":31130,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_joinchat":[],"footnotes":""},"categories":[1519],"tags":[2283,2788,3793,1353],"class_list":["post-31125","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting-banking-and-finance","tag-capital-account","tag-capital-account-convertibility","tag-international-trade","tag-rbi"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Capital Account Convertibility - Vskills Blog<\/title>\n<meta name=\"description\" content=\"What is capital account convertibility? How will it benefit an economy? Apply for a Vskills certification in accounting now. 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