When a country has an inconvertible currency the government adopts exchange controls and becomes a monopolist with respect to holding all foreign exchange.

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When a country has an inconvertible currency, it means that its currency cannot be freely exchanged for foreign currencies. To manage this, governments often adopt exchange controls, regulating the exchange of domestic and foreign currencies. This effectively makes the government or its central bank the sole entity (monopolist) that can hold or transact in significant amounts of foreign exchange, as they control the exchange rates and the flow of foreign currency in and out of the country.

When a Country Has an Inconvertible Currency the Government Adopts