Capital Account Convertibility

Capital account convertibility is a feature of a nation's financial regime that centers on the ability to conduct transactions of local financial assets into foreign financial assets freely and at country determined exchange rates. It is sometimes referred to as capital asset liberation or CAC.

In layman's terms, full capital account convertibility allows local currency to be exchanged for foreign currency without any restriction on the amount. This is so local merchants can easily conduct transnational business without needing foreign currency exchanges to handle small transactions. CAC is mostly a guideline to changes of ownership in foreign or domestic financial assets and liabilities. Tangentially, it covers and extends the framework of the creation and liquidation of claims on, or by the rest of the world, on local asset and currency markets.

Read more about Capital Account Convertibility:  History, Tenets, Application, Controversy

Famous quotes containing the words capital and/or account:

    Like cellulite creams or hair-loss tonics, capital punishment is one of those panaceas that isn’t. Only it costs a whole lot more.
    Anna Quindlen (b. 1952)

    Resorts advertised for waitresses, specifying that they “must appear in short clothes or no engagement.” Below a Gospel Guide column headed, “Where our Local Divines Will Hang Out Tomorrow,” was an account of spirited gun play at the Bon Ton. In Jeff Winney’s California Concert Hall, patrons “bucked the tiger” under the watchful eye of Kitty Crawhurst, popular “lady” gambler.
    —Administration in the State of Colo, U.S. public relief program (1935-1943)