![]() In a similar fashion, limiting international currency exchange prevents capital flight which is the massive outflux of a currency off a market. So if an economy is in trouble, a government may limit the selling of its currency in order to artificially inflate its value. To make it simple, people wanting to buy a currency makes its exchange rate go up and people wanting to sell a currency makes it go down. Supply and demand plays a key role in determining the restrictions of a currency. Why are there so many restrictions in currencies Limit access to foreigners for business and tourismīy controlling anybody to exchange the currency, the hope is that the value of the currency remains stable. For example, recently Venezuela placed restrictions in its currency in order to control the extreme devaluation of its currency. There are many reasons for a currency to be restricted, most of which being government imposed. ![]() With the growth of free-market economies most countries abandoned these rules. Why is a currency restricted to begin with? Why do governments impose currency restrictions?īefore the 90s most countries in the world had restrictions in place in some shape or form. This can be an even bigger issue if you are planning to visit an exotic or obscure destination and a specialist such as B2B Pay or any other party has restricted access to the currency you need. It is certainly shocking to realize that your local bank often times does not carry actual currency and that if you want to exchange either US dollars or Euros you may have to place an order and wait for 4 days to get some cash on your hands. ![]()
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