exchange controls

exchange controls definition - finance
Government regulations that limit or prevent currency or bank deposits from being moved out of the country. Governments apply exchange controls with the intention of maintaining orderly capital flows and preventing a run on their currency, in which businesses and individuals quickly sell the currency in exchange for another currency that is perceived to be more stable and valuable, such as the U.S. dollar. Free-market advocates disapprove of exchange controls because they restrict trade and business transactions.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

Comments
Improve this definition.
Do you have more to add? Share your linguistic knowledge or observation.
/Register to save your comments.