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 ?
Saudi Arabia's budget is under pressure, and Nigeria has imposed foreign exchange controls in response to the hit to their economy caused by falling oil prices.
The blackout of information as a consequence of government restrictions drove demand for information from social networks and Venezuelans continued to demand mobile devices with internet access so as to be informed about important news items, despite the introduction of new import tariffs or more restrictive foreign exchange controls, which hampered supply in 2015.
Argentina's central bank has said that it will immediately end its foreign exchange controls.
Buenos Aires, Safar 12, 1437, November 24, 2015, SPA -- Argentinian president-elect Mauricio Macri said Monday that he will focus his efforts on ending foreign exchange controls, boosting economic growth and fighting corruption and street crime, dpa reported.
Foreign exchange controls catalyzed industrialization controlled by Filipino entrepreneurs and captains of industry like Salvador Araneta, Hilarion Henares Jr., Filemon Rodriguez, Col.
New York (AirGuide Features - Inside Air Travel) Fri, Jul 11, 2014 United Airlines will drop its daily flight to Caracas from Houston, starting in September, joining other carriers who have cut service over the country's foreign exchange controls. United said it will operate four flights a week to the country, starting September 17.
LIBERAL AND FREE market economy without any ownership restriction or foreign exchange controls
"We had foreign exchange controls but we were not benefiting because the investors would buy air-tickets pretending to travel and collect the foreign currency only to cancel the ticket.
Argentina decided to loosen strict foreign exchange controls a day after the peso suffered its steepest daily decline since the country's 2002 financial crisis .
Foreign exchange controls and restrictions are now minimal.
Argentina's business class has been angered by Kirchner's failure to control inflation and protectionist economics, import restrictions, the nationalization of companies such as energy giant YPF and foreign exchange controls.
This implies foreign exchange controls over a long period, something which is contrary to EU law and policy.

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