Change to indirect speech: She said, ‘I can speak French fluently.’

When converting direct speech to indirect (reported) speech, several changes occur, especially if the reporting verb is in the past tense. The tense of the verb in the reported clause usually shifts backward (backshift).

• The reporting verb 'said' is in the past tense.
• The pronoun 'I' changes to 'she' to match the subject of the reporting clause.
• The modal verb 'can' must backshift to its past form, 'could'.
• The conjunction 'that' is typically used to introduce the reported clause.

Therefore, 'She said that she could speak French fluently' is the correct transformation. Options A, B, and C fail to apply the correct backshift or introduce grammatical errors.