What is a convertible currency

Convertible means freely convertible currency.

The free exchange of foreign exchange includes two forms: full free exchange and free exchange under current account.

Full convertibility means that a country removes controls on all foreign exchange payments, and residents can obtain foreign exchange not only through current account, but also through capital account transactions.

The foreign exchange obtained can be sold to banks on the Internet or held at home or abroad.

The free convertibility of the current account means that the foreign exchange needed for the exchange of goods or services can be purchased on the foreign exchange market, but the foreign exchange needed for the exchange of asset capital is not freely available.