Question

Objectives of exchange control?discuss the foreign exchange regulation concerning exports under exchange under exchange control regulations

Answer 1

Definition of Foreign Exchange Control:

In modern times various devices have been adopted to control international trade and regulate international indebtedness arising out of international workings and dealings.

ADVERTISEMENTS:

The spirit of economic nationalism induces every country to look primarily to its own economic interests. Foreign Exchange control is one of the devices adopted for the purpose.

Foreign Exchange control is a system in which the government of the country intervenes not only to maintain a rate of exchange which is quite different from what would have prevailed without such control and to require the home buyers and sellers of foreign currencies to dispose of their foreign funds in particular ways.

Definition:

(1) “Foreign Exchange Control” is a method of state intervention in the imports and exports of the country, so that the adverse balance of payments may be corrected”. Here the government restricts the free play of inflow and outflow of capital and the exchange rate of currencies.

2. According to Crowther:

ADVERTISEMENTS:

“When the Government of a country intervenes directly or indirectly in international payments and undertakes the authority of purchase and sale of foreign currencies it is called Foreign Exchange Control”.

3. According to Haberler:

“Foreign Exchange Control in the state regulation excluding the free play of economic forces for the Foreign Exchange Market”. The Government regulates the Foreign Exchange dealings by Consideration of national needs.

To be more clear, “Foreign Exchange Control means the monopoly of the government in the purchase and sale of foreign currencies in order to restore the balance of payments equilibrium and disregard the market forces in the decision of monetary authority”. When tariffs and quotas do not help in correcting the adverse balance of trade and balance of payments the system of Foreign Exchange Control is restored to by Governments.

Objectives of Foreign Exchange Control:

Important objectives of Exchange Control are as follows:

1. Correcting Balance of Payments:

The main purpose of exchange control is to restore the balance of payments equilibrium, by allowing the imports only when they are necessary in the interest of the country and thus limiting the demands for foreign exchange up to the available resources. Sometimes the country devalues its currency so that it may export more to get more foreign currency.

2. To Protect Domestic Industries:

The Government in order to protect the domestic trade and industries from foreign competitions, resort to exchange control. It induces the domestic industries to produce and export more with a view to restrict imports of goods.

Answer 2

Exchange control and the foreign exchange regulation concerning exports.

Explanation:

• The exchange control is a form of the control that is imposed by the government that takes place on the purchase and sales of the local currencies by the nonresidents or the transfer of this currency across the national borders.

• it allows the countries to better manage their economies by controlling their inflow and the outflow of currency there maintaining the exchange rate volatility.

• It commonly includes the banning and use of the foreign currencies and banning the local people from taking the foreign currencies and by fixing the exchange rates.

• Also restricting the currency exchange by the government-approved exchangers. Along with limiting the currency that can be imported or exported.

• By fixing the Balance of Payments and to provide protection to the Domestic infant Industries:

Learn more about the exchange control and the foreign exchange regulation concerning exports.

• brainly.in/question/3855135 answered by Bijalanubha123.