If a currency is convertible on the current account, which of the following transactions would not be permissible?
A)The purchase of foreign currency in order to import goods or services
B)The sale of foreign currency resulting from the export of goods or services
C)The purchase of foreign currency in order to purchase assets abroad
D)The sale of foreign currency resulting from the sale of assets abroad

Question

Quizplus · Accepted Answer

When a currency is convertible on the current account, it means it can be freely exchanged for foreign currencies for transactions related to the import and export of goods and services. However, it does not automatically allow for the free conversion of currency for capital account transactions, such as purchasing assets abroad, which is covered under C.

If a Currency Is Convertible on the Current Account, Which