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Definition of 'Limited Convertibility'
A situation in which government regulations prevent the free conversion of the home currency into a foreign one. Because the government is only able to regulate currency transactions within its borders, foreigners are still able to trade the currency. Only residents are unable to convert a currency with limited convertibility.
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Investopedia explains 'Limited Convertibility'
Limited convertibility can have a cooling effect on trade as well as foreign direct investment. However, countries that are in the process of moving to a more open economy may need to open up currency restrictions in steps rather than all at once. This has been the case in the development of countries that once had centrally planned economies, as opening up domestic markets would subject the home market to foreign competition.
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Search results for 'Limited Convertibility'
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http://www.investopedia.com/university/insurance/insurance8.asp
... that the insured can renew the policy for a limited number of years (ie. a term
between 5 and 30 years) based on attained age. Convertibility provisions permit ...
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http://www.investopedia.com/articles/stocks/06/preferredstock.asp
... Convertibility As with convertible bonds, preferreds can often be converted into
the ... on US government issues, providing the investor limited protection against ...
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http://www.investopedia.com/articles/03/050703.asp
... stability was a lot easier because the amount of gold available was limited. ... at that
time was primarily responsible for maintaining the convertibility of gold ...
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http://www.investopedia.com/articles/forex/09/currency-cross-triangulation.asp
... This rule also established convertibility to six, then three, decimal places and
the ... For the small retail trader with limited funds, this would probably work ...
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