what is a restricted currency 
a restricted currency has its value set by the government some countries have restricted currencies meaning they restrict the exchange of their currency to within their borders or establish both an onshore rate and an offshore rate china is an example the chinese government sets a midpoint value for the currency every day allowing the yuan to trade in a band of 2 from this midpoint the bottom linean exchange rate is the value of one currency in relation to the value of another currency most exchange rates are floating and rise or fall based on the supply and demand in the foreign exchange market but some are pegged to another country s currency or are fixed in value fluctuations in a nation s exchange rate have an impact on the demand for its products abroad and the prices its consumers pay for imports 