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A convertible currency is a liquid instrument when compared to currencies tightly controlled by a central bank or other regulating authority (Investopedia, 2017).Whereas a nonconvertible currency is a currency that is primarily used for domestic transactions and is not openly traded on a foreign exchange market.

A restricted currency, also known as 'blocked' or non-convertible currency, is the monetary unit of a country where holders of the currency do not have the right to convert it freely at the going exchange rate into any other currency.

When looking at currency convertibility, there are three different categories; fully convertible, partially convertible, and non-convertible.

A currency fixing is a set time each day when the prices of currencies for commercial transactions are set, or fixed.A sharp rally in a specific currency pair on fixing-related buying, for example, may suddenly come to an end at the fixing time and see the price quickly drop back to where it was before.

Convertibility is the quality that allows money or other financial instruments to be converted into other liquid stores of value. Convertibility is an important factor in international trade, where instruments valued in different currencies must be exchanged.

Freely convertible currencies means the euro, the Japanese yen, the pound sterling, the Swiss franc, the United States dollar, and any other currency which has been designated from time to time by a competent international monetary organization as being in fact widely used to make payments for international

Exchange controls are government-imposed limitations on the purchase and/or sale of currencies. These controls allow countries to better stabilize their economies by limiting in-flows and out-flows of currency, which can create exchange rate volatility.