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A blocked currency is a currency that can't freely be converted to other currencies on the foreign exchange (FX) market as a result of exchange controls. It is mainly used for domestic transactions and does not freely trade on a forex market, usually due to government restrictions.
definition. In contrast with the free-floating currencies, restricted currencies are those subject to currency controls, that is, limits imposed by their respective governments to guarantee a certain stability on the value of that currency.
currency restriction. Rule or requirement imposed by a country's monetary authorities to regulate its inflow or outflow. Also called currency control.
Local currency (Sri Lanka Rupee-LKR) up to LCR 20,000. —. Foreign currencies: no restrictions, however amounts over USD 15,000. — (or equivalent) must be declared on arrival, except for Indian and Pakistan currencies which are prohibited.
Exchange controls are government-imposed limitations on the purchase and/or sale of currencies. These controls allow countries to better stabilize their economies by limiting in-flows and out-flows of currency, which can create exchange rate volatility.
The paper currencies of some developed countries have earned recognition as hard currencies at various times, including the United States dollar, Euro, Swiss franc, British pound sterling, Japanese yen, and to a lesser extent, the Canadian dollar and Australian dollar.
Some examples of hard currencies are: dollar of the United States, yen of Japanese, pound of British, franc of France, and the euros of Europe. Soft currency: Soft currency is unstable, convertible with other currencies.
When the exchange rate is 1 USD = 80 JPY, more U.S. dollars can be obtained for the same amount of yen than when the rate is 1 USD = 100 JPY, which indicates a stronger yen.
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