The degree of BOP convertibility of a country usually depends on the level of its economic development and degree of maturity of its financial markets. Therefore, advanced economies (AEs) are almost fully convertible while emerging market economies (EMEs) are convertible to different degrees. Why is capital account convertibility important? 4.
Free capital mobility, or internationalization of capital markets, is commonly recognized  as  an  engine  of  global  growth. Specifically,  benefits  of  internationalization of capital markets are well accepted, in terms of broadening the investor base for recipient country financial assets, improved liquidity in financial markets and positive pressures for market infrastructure and market practices.