In order to hedge the currency risk arising out of such ECBs, forward foreign exchange contracts with Indian Rupee as one of the currencies, foreign currency-Indian Rupee options and foreign currencyIndian Rupee swaps have been permitted. The debate on internationalization of a currency often goes hand-in-hand with that on capital account convertibility.
It is a known fact that capital controls can co-exist with an international currency. Economic history is rich with examples of countries, especially advanced countries with an international currency, imposing a variety of capital controls to stem the depreciation/appreciation of their currencies and/or to regulate short-term capital flows.