they are those currencies that may be exchanged for a foreign currency. dollars, euros, pounds are some of the examples

Freely convertible currency is one against which you can get the local currency easily. This will remain valid round the globe. This is the reason why we are supposed to convert our currency(Rupee)into dollars on the Airport when we go abroad because there dollar, which is a freely convertible currency, will help us get the local currency. Other examples are Euros and pound too.