Which of the following is a reason why governments limit convertibility of their currency?

Question

Quizplus · Accepted Answer

Governments limit convertibility of their currency to preserve their foreign exchange reserves. By restricting the amount of currency that can be converted to another currency, governments can maintain a stable exchange rate and prevent the depletion of their reserves. This is important for countries that rely heavily on exports and need to maintain a competitive exchange rate. Moreover, it is a way to avoid speculative attacks that may lead to a rapid depreciation of the currency, which can harm the economy.

Which of the Following Is a Reason Why Governments Limit