Convertibility of rupee implies

Convertibility of the rupee refers to the freedom to exchange the domestic currency for foreign currencies and vice versa at market-determined rates, making option (c) the precise definition. Option (b) is the most tempting wrong choice because it describes a "floating exchange rate" system, which concerns how the currency's value is determined rather than the legal permission to convert it. The core concept tested is currency convertibility, a key pillar of a country's integration with the global economy through its current and capital accounts.