In the aftermath of the crisis, capital account convertibility is no longer seen as a secular objective to be pursued and capital account restrictions are, in certain situations, seen to be important policy instruments to promote financial and macroeconomic stability.
Be that as it may, in the current discourse, we see opening up of the capital account as a process rather than as an event. Further, it is also recognised that unless capital account liberalisation is accompanied by achievement of certain “thresholds” and financial and institutional developments, the costs may far outweigh the benefits. 24. Where do we stand in this regard?