Foreign exchange controls

Foreign exchange controls are the various limitations or ban imposed by the government on purchase/sale of foreign or local currencies.

Common foreign exchange controls include:

  • Banning the use of foreign currency within the country
  • Banning locals from possessing foreign currency
  • Restricting currency exchange to government-approved exchangers
  • Fixed exchange rates
  • Restrictions on the amount of currency that may be imported or exported

Foreign exchange controls are usually used by countries with weak economies in an attempt to prop up a weakening currency.

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