Consider the following statements: Full convertibility of the rupee may mean 1. its free float with other international currencies. 2. its direct exchange with any other international currency at any prescribed place inside and outside the country. 3. it acts just like any other international currency. Which of these statements are correct?

1. Full convertibility of the rupee refers to the freedom to convert the domestic currency (rupee) into foreign currencies and vice versa without restrictions, for both current account transactions (trade, remittances) and capital account transactions (investments, loans). 2. Statement 1 is related. Full convertibility implies that the exchange rate is largely determined by market forces of supply and demand, leading to a free float (or managed float) against other international currencies, rather than being fixed by the central bank. 3. Statement 2 describes the operational aspect. Full convertibility means residents and non-residents can undertake direct exchange of the rupee with any other international currency for permitted transactions at authorized dealers (prescribed place) inside and outside the country (subject to regulations of the respective countries). 4. Statement 3 suggests equivalence. While full convertibility increases the ease of using the rupee in international transactions, it doesn't automatically make it act just like any other major international currency (like the US dollar) in terms of global acceptance as a reserve currency or invoice currency. However, it moves significantly closer to that status in terms of exchangeability. 5. In essence, full convertibility encompasses the ideas of market-determined exchange rates (free float), freedom of exchange for most purposes, and thereby increasing the international usability of the currency. Thus, all three statements capture aspects of what full convertibility implies or leads to. Therefore, statements 1, 2, and 3 are correct in reflecting the meaning and implications.