Convertibility of the rupee typically refers to the ability to freely convert the domestic currency, the rupee, into other major currencies and vice versa. It implies that individuals and businesses can exchange rupees for foreign currencies such as the US dollar, euro, pound sterling, etc., and vice versa at market-determined exchange rates.

The convertibility of the rupee allows for international trade and transactions to take place smoothly by enabling the easy movement of money across borders. It facilitates foreign investment, tourism, and other economic activities by providing a mechanism for converting domestic currency into foreign currency for various purposes.

It`s important to note that the convertibility of the rupee does not necessarily imply a fixed exchange rate or a connection to gold. The value of the rupee in relation to other currencies is typically determined by market forces such as supply and demand, economic factors, and other variables that influence exchange rates in the foreign exchange market.

While the development of an international market for currencies can be a component of currency convertibility, it is not an inherent requirement. The primary focus is on the freedom to convert the rupee into other major currencies and vice versa based on prevailing exchange rates in the market.