Limited Convertibility

Limited Convertibility

The situation in which the residents of a country may not buy foreign currencies, but in which non-residents are permitted to by the domestic currency. A country may adopt limited convertibility to encourage foreign direct investment (in the domestic currency) while discouraging capital flight (by the residents). See also: Inconvertibility, Foreign exchange.
References in periodicals archive ?
Scandalously, they still have to surrender 50% of their foreign-exchange reserves to the French Treasury as a guarantee of the CFA franc's limited convertibility and free transfer to France.
The gradual internationalization of the RMB must be understood in the broader context of the limited convertibility of the currency.
Carbon markets are plagued by burgeoning policies, frameworks and currencies, poor linking and limited convertibility.

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