Exchange Controls on FX rates

Movements of foreign and domestic currencies can sometimes, be restricted by the governments in or out of the country. The payments and trades of a country are controlled when it is vital, this happens mostly during the wartime. For example, in the Emergency Powers (Defense Act) of 1939, a provision to control trade and exchange were introduced. However, this repeats in 1947 and replaced is by the Exchange Control Act. Until 1979 in the UK, finally exchange controls were not abolished. Some developing countries frequently impose Exchange controls. Countries having high foreign debts, want to allocate thin foreign currency receipts for servicing those debts and for essential imports. Such countries without rigid control and foreign exchange may not be possible for them to function.