Restricting foreign exchange

Description

Restricting foreign exchange involves implementing controls or limits on the purchase, sale, or transfer of foreign currencies by individuals, businesses, or financial institutions. The primary intent is to stabilize national economies, protect foreign reserves, curb capital flight, and address balance of payments deficits. Practical measures include licensing requirements, quotas, and official exchange rates, aiming to prioritize essential imports, support domestic industries, and prevent currency speculation or depletion of national financial resources.

Context

As much as US$400,000 million flows through the global foreign exchange system if a major banking house each day, yet only one dollar in 20 of that has any relation to financing real international trade.