What is the purpose of capital controls?

Business

1 answer:

Usimov [2.4K]3 years ago

5 0

Answer:

2. To support fixed exchange rates and prevent speculative attacks on currencies

Explanation:

Capital control is any restriction placed on the exchange of currencies across a countries borders. It is done to prevent volatility of exchange rate. it reduces speculative attacks on currency. It also controls the flow of currency in an economy.

Capital control can be in the form of a fixed exchange rate or placing an upper limit on the amount of currency that can be imported or exported.

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