Subsequently, India moved to current account convertibility in August 1994 by liberalising various transactions relating to merchandise trade and invisibles. The impact of policy changes was reflected in lower CAD and its comfortable financing in subsequent years.
India could manage the external shocks that emanated from the East Asian crisis in 1997 and subsequently, the rise in international oil prices and bursting of  4  Reddy, Y.V. (2006), “Dynamics of Balance of Payments in India”, Speech at the first Diamond Jubilee lecture of the Department of Commerce, Osmania University on December 16.