one of the forms of state control of international economic relations, expressed in the regulation of international settlements and the method of carrying out transactions with currency and other foreign exchange valuables.
Foreign-exchange control in the capitalist countries depends on the overall state of the international economic and political relations of the capitalist world, the economic and political position of the particular country, and the state of its balance of payments and monetary circulation. The capitalist countries institute foreign-exchange control in order to level out the balance of payments, change the import structure or limit imports, reduce payments abroad, and concentrate currency resources in the hands of the state for use in the interests of the monopoly capitalists. During the period of the general crisis of capitalism, more and more capitalist states use foreign-exchange control as one of the tools of state intervention in foreign trade, the import and export of capital, and other foreign accounts. In the developing countries foreign-exchange control serves as one of the measures of protection against foreign economic expansion by the imperialist states and promotes the use of valuta resources in the national interests of developing the particular country.
Foreign-exchange control began with a ban on the export of gold, and then gradually spread to other foreign exchange valuables, including payment capital and securities—stocks and bonds. The first valuta restrictions were instituted in Germany, Austria, and other countries during World War I. From 1924 to 1929 (the so-called years of stabilization) foreign-exchange control was slackened somewhat; however, during the period of the world economic crisis of 1929-1933, it was intensified and applied to all forms of international economic ties, including foreign trade. During World War II, as a result of the exacerbation of the problem of supply and marketing, foreign-exchange control began to be used more and more widely by the capitalist states as a means of foreign trade policy.
The foreign-exchange laws of the capitalist countries define a range of currency transactions that are subject to control. These include foreign-trade transactions and transactions involving international movement of capital and international debt relationships, transactions with gold and other foreign-exchange valuables, and also transactions related to the development of such spheres of international relations as tourism, the payment of reparations, and so on. During the postwar period, with the introduction of full or partial convertibility of currencies, foreign-exchange control was abolished in some developed capitalist countries, while in others it was slackened in the area of foreign trade but preserved in the area of the movement of capital and credits. In the developing countries foreign-exchange control has been entirely retained.
In the USSR, foreign-exchange control is based on the valuta monopoly. This control regulates transactions with foreign exchange valuables and is directed to concentrating all currency resources with the state, in the person of the banks authorized for this purpose, the Gosbank (State Bank) of the USSR and the Foreign Trade Bank of the USSR, so that this currency can be used to accelerate the rate of development of the national economy and to strengthen the monetary system of the USSR.
V. A. MARKOV