A policy by which government restrict the amount of foreign currencies bought and sold is known as

Answer Details

A policy by which government restricts the amount of foreign currencies bought and sold is known as exchange control. Exchange control is a type of government intervention in the foreign exchange market, which is the market where currencies are bought and sold. The aim of exchange control is to restrict the amount of foreign currency that can be bought or sold by residents of a country. This is usually done by imposing restrictions on the amount of foreign currency that individuals or companies can purchase, or by requiring that all foreign currency transactions go through a government-controlled exchange rate. The government may also limit the amount of foreign currency that can be taken out of the country. Exchange control is often used as a way of managing a country's foreign exchange reserves, which are the foreign currencies held by a country's central bank. By restricting the amount of foreign currency that can be bought or sold, the government can control the flow of foreign currency into and out of the country, which can help to stabilize the exchange rate and protect the value of the country's currency. Therefore, exchange control is a policy by which government restricts the amount of foreign currencies bought and sold.