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• To maintain, stabilize and control the exchange rate
• To protect the domestic industries from the foreign competition.
• Exchange control improves the balance of payment.
• To check the flow of capital when in a country symptoms of devaluation appear, the foreigners who have invested in that country begin to withdraw their capital. The exchange control system is adopted to stop capital-drain from the country.
• Economy in the use of foreign exchange. Development of any country mostly depends on the deposits of foreign exchange available with any country. To accumulate foreign exchange deposits, only those commodities should be imported which are very vital. To put a check on the import of unnecessary goods, foreign exchange control is considered the most effective instrument.
skilled writter answered the question on May 1, 2018 at 16:25
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