What is capital covertibility?

Question

Capital Convertibility how does it affect the economy and sensex of a country.

Answer 1

capital covertibility refers to the freedom to convert local financial assets into foreign financial assets and vice versa at market determined rates of exchange. It is associated with changes of ownership in foreign/domestic financial assets and liabilities and embodies the creation and liquidation of claims on, or by, the rest of the world."

Answer 2

The ability to move assets from one area of productive investment to another. i.e. basic tools have higher capital convertability than specialized tools because they are less specific to the inputs being processed in production.