One of the important goals of the economic liberalisation policy is to achieve full convertibility of the Indian rupee. This is being advocated because

The correct answer is Option B.

Full convertibility of the Indian rupee means that the currency can be freely exchanged into any foreign currency without government restrictions for both current account and capital account transactions.

During the economic liberalization of the 1990s, full convertibility was strongly advocated because it attracts more foreign capital inflow into India. Foreign investors and multinational corporations are significantly more willing to invest in an economy if they have the assurance that they can freely repatriate their profits, dividends, and principal investments without administrative hurdles.

• Option A is incorrect: Full convertibility does not inherently stabilize exchange rates. Instead, it makes the currency susceptible to global market forces, speculative attacks, and potential capital flight, which often increases exchange rate volatility. This is why the RBI has remained cautious regarding full capital account convertibility.
• Option C is incorrect: Export promotion is generally driven by an undervalued or depreciated currency and trade policies, rather than convertibility alone.
• Option D is incorrect: Securing international loans depends largely on sovereign credit ratings, fiscal deficits, and macroeconomic fundamentals, not just having a fully convertible currency.