What do you mean by exchange control? Describe the broad objectives of exchange control.

Exchange control refers to the regulatory measures imposed by a country's government to manage and regulate foreign exchange transactions. It involves the restrictions and monitoring of the buying and selling of foreign currencies in order to achieve specific economic goals. Governments implement exchange control to ensure the stability of their national currency, prevent excessive capital outflows, and regulate trade in foreign exchange to support the balance of payments.

The primary aim of exchange control is to maintain a stable exchange rate and protect the national economy from adverse external economic shocks. When a country faces a large trade deficit or significant currency devaluation, it may resort to exchange control measures to protect its foreign exchange reserves. This helps the country avoid the risk of a currency crisis and ensure adequate resources for international trade and debt obligations.

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