The monetary policy, exchange rate policy, and policy regarding the degree of capital account convertibility are the most important in the current global scenario. Many economists have discussed these policy choices from a different point of views, but the most important contribution in this context is made by Robert Mundell and Marcus Fleming in 1960s as they have thrown light on all the three policy goals. These policy choices are discussed in the form of “International Trinity Hypothesis”. This hypothesis states that an open economy cannot simultaneously choose the policies of monetary policy independence, exchange rate stability, and full capital account convertibility. Only two out of these goals can be achieved at a given point of time. The selection of a mixed bag of two corners of the trinity triangle is a very cautious decision for every economy due to the fact that three choices have their own merits and demerits. Thus, every economy always tries to select that combination which is most appropriate according to the domestic conditions and international position of the economy.