Foreign exchange controls are numerous 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.

Frequent foreign exchange controls consist of:

Banning the use of foreign currency inside the country

Banning locals from possessing foreign currency

Restricting currency exchange to government-approved exchangers

Fixed exchange rates

Restrictions on the amount of currency that may possibly be imported or exported

Nations with foreign exchange controls are also called “Article 14 nations,” after the 

provision within the International Monetary Fund agreement allowing exchange controls for 

transitional economies. Such controls utilised to be common in most nations, particularly 

poorer ones, till the 1990s when free trade and globalization started a trend towards 

economic liberalization. Today, countries which still impose exchange controls are the 

exception instead of the rule.