foreign exchange controls

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Foreign exchange controls

Various forms of controls imposed by a government on the purchase/sale of foreign currencies by residents or on the purchase/sale of local currency by nonresidents.

Foreign Exchange Controls

Restrictions on foreign currencies in a country. These controls may range from the basic, such as banning the use of a foreign currency in domestic stores and shops, to the dramatic, such as banning currency conversion. Every country has some foreign exchange controls to protect their currencies, but nations with weak currencies are more likely to impose more controls. See also: Pegged Currency, Crawling Peg.

foreign exchange controls

Restrictions that are imposed by a nation on the free exchange and convertibility of its own currency. Foreign exchange controls are most often instituted by countries whose currencies are weak and whose citizens prefer to hold and use the currencies of other nations. Institution of foreign exchange controls hinders foreign investors who wish to extricate their funds.

foreign exchange controls

the application of restrictions on the availability of FOREIGN CURRENCIES by a country's central bank, to assist in the removal of a BALANCE OF PAYMENTS deficit and to control disruptive short-run capital inflows and outflows which tend to destabilize the country's EXCHANGE RATE. Because importers need to purchase foreign currencies from the country's central bank (via their commercial banks) in order to buy products from overseas suppliers, by cutting off the supply of foreign currencies the authorities can reduce the amount of IMPORTS to a level compatible with the foreign currency earned by the country's EXPORTS. Exchange controls may be applied not only to limit the total amount of currency available but can also be used to discriminate against particular types of imports, thus serving as a form of PROTECTIONISM. See FOREIGN EXCHANGE MARKET.

foreign exchange controls

restrictions on the availability of FOREIGN CURRENCIES by a country's CENTRAL BANK to assist in the removal of a BALANCE OF PAYMENTS deficit and to control disruptive short-run capital flows (HOT MONEY) that tend to destabilize the country's EXCHANGE RATES. Where importers can only purchase foreign currencies from the country's central bank (via their commercial banks) in order to buy products from overseas suppliers, by cutting off the supply of foreign currencies the authorities can reduce the amount of IMPORTS to a level compatible with the foreign currency earned by the country's EXPORTS. Exchange controls may be applied not only to limit the total amount of currency available but can also be used to discriminate against particular types of imports, thus serving as a form of PROTECTIONISM. See FOREIGN EXCHANGE MARKET.
References in periodicals archive ?
Prospective investors should carefully review the information contained in the prospectus and simplified prospectus and consult their professional legal, tax and financial advisers as to the suitability of any investment in light of their particular circumstances and applicable citizenship, residence or domicile, including any tax or foreign exchange control restrictions.
A unique team of specialists analyse the operational framework of foreign exchange control.
The LDP is preparing a bill to revise the foreign exchange control law for a similar purpose.
The tax authority referred Hanjin's Honorary Chairman Cho Choong Hoon and his two sons as well as two Hanjin-affiliated companies run by the sons to prosecutors on suspicion of tax evasion and the violation of the foreign exchange control law.
The CBE also monitors bureaux de change and money transmission companies for foreign exchange control purposes, giving special attention to those accounts with transactions above certain limits.
It would be the second law aimed at pressuring North Korea, following one enacted last month to revise the foreign exchange control law.
The scope of the agreement would cover cross-border payment and settlement items of relevant foreign currencies in compliance with the requirements of the rules and regulations on foreign exchange control.
The government has no intention whatsoever to reintroduce foreign exchange control regulations.
Although it is the importer's responsibility to comply with foreign exchange laws, foreign suppliers should take into account the risks associated with the Chinese foreign exchange control regime, as it can hinder or prevent payment: for example, some importers are not entitled to make advance payments or to pay the purchase price by way of letter of credit.
The Japanese government recently revised a foreign exchange control law that enables it to halt transfers from Japan to North Korea.
A top Chinese foreign exchange control official said China plans to allow its currency to float in a wider range against a basket of foreign currencies, the Financial Times reported Thursday.
He has a deep knowledge of controls and broad experience in policy coordination, foreign exchange control, supervision of international and Japanese banks, and managing complex relationships with multilateral organisations.

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