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For those people who did not experience it:

During the Cold War most countries of the Warsaw Pact had ridiculously high sentences for exporting their own money. That means that if you have some coins/notes (or even stamps) left, forgot them and the border police caught you, it was entirely possible that you ended several years in prison.

This was especially annoying because the money was essentially worthless abroad.

IS there any historic case where evildoers exported huge amount of cash out of a country and were able to cause noticable damage to the economy?

Bonus points if someone can explain what the government of the countries exactly feared, or aimed to achieve, by prohibiting exporting money ?

I do not count as currency money which is like exporting goods (gold and silver from the colonies in South America): only fiat money.

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    One effect (and possibly the intended purpose) of these laws was that tourists had to spend it all within the country. If you converted too much from traveller's cheques (or whatever), you were stuck with buying a lot of useless stuff at the last gift shop before the border. Leftover banknotes had to be handed over but keeping a few coins (pocket change) wasn't a problem. – bgwiehle Jan 15 '17 at 14:06
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    @bgwiehle I didn't go into WP countries during the Cold War, but I travelled to some other countries with money export controls and usually foreigners are allowed to change back the excess money on exit (there may be some bureaucracy like keeping a receipt when you buy local money to show that the money was not bought in the black market). One possible reason would be to control flux of money from rival countries; allowing to export money would allow to smuggle it back into the country to support people and organizations (trade unions, churchs) that oppose the regime. – SJuan76 Jan 15 '17 at 18:13
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    The interdiction to export money also exists today in Morocco and Tunisia. – Bregalad Jan 15 '17 at 18:38
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    @ThorstenS. but in those countries, to have money in foreign currency was a crime too. They could get away with a small amount, but giving lots of thousands of US$ or Deustche Mark to, say, Solidarity in Poland would have meant a risk for the organization (which you had to assume was already under surveillance), since they would risk being caught breaking the law with the foreign money. A tourist legally changing $100.000 in zlotis would have attracted a lot of attention, and illegal networks would have had issues with such amounts and would probably have their share of informants. – SJuan76 Jan 15 '17 at 18:55
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    @SJuan76 I traveled extensively in the WarPac countries, and several of them had no facilities for foreigners to convert the local currency back into hard currency. It was illegal. And as you couldn't export the local currency, you had to spend it though everyone took some coins and smaller notes with them as souvenirs, nobody seemed to care. Not surprising as the goal was to lock in the hard currency more than anything. – jwenting Jan 18 '17 at 9:37
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One reason for export restrictions on your currency can be to prevent foreign government agencies (CIA...) from building up stockpiles to be used in covert operations. Less to do with economics than politics of course, unless that stockpile is then dumped on your market and used to disrupt the economy through an oversupply of funds (many countries try to regulate the value of their currency by controlling the amount of it that exists in circulation). To have a large enough effect to seriously damage an economy however would require such large amounts of cash that it's extremely unlikely any foreign agency would be able to acquire that much in a reasonable amount of time.

But using it to bribe or otherwise pay your citizens in key positions to act as their agents is a definite risk, and if those citizens are in positions where they can cause economic disruptions even a smaller amount of money can cause economic trouble (think of the theoretical foreign agency bribing key people in the Iranian oil industry to sabotage all their export terminals to fail at the same time for example).

Combined with using your currency export ban as a trap for foreign currency (foreigners now cannot buy your currency abroad, so the only way visitors to your country can get your currency is by buying it using their own, more valuable, currency at your government controlled banks) and you have a powerful incentive for some countries to impose export bans on their currency. And that last incentive is very real, and the main reason the USSR and others (including many of its former constituent states) have such restrictions, it's a big source of hard currency for them (in fact some such countries even require foreign visitors to exchange a minimum amount for every day they stay, an amount higher than they're likely to need for their minimum expenses of lodging, food, and transport, as an incentive for foreigners to spend big on souvenirs).

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    Your first paragraph seems to describe a worry that exactly the kind of thing asked about in the question might happen. Surely, if that worry isn't unfounded, it has actually happened in the past? – T.E.D. Jan 18 '17 at 19:00
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    Very good (so +1), but did it happened in the past ? While China is bunkering US-Dollar (it is still not cash) and could put economical pressure on the USA, I still miss a happened case where an economy was really deep in trouble because of exported cash. – Thorsten S. Jan 18 '17 at 22:01
  • @ThorstenS. Wasn't that the case in the USA in 1971? I am not confident enough to write an answer based on that, but I thought Nixon broke with the Bretton Woods gold standard to prevent a cash exodus that the US did not have sufficient gold to cover. I believe that export controls were used as a short-term defensive measure during that crisis. – Mike Supports Monica Jan 19 '17 at 22:38
  • If a foreign government wants to severely damage your economy, there are much easier ways. Even if a foreign government wants to severely damage your economy through excessive inflation, it'd still be easier simply to counterfeit your money than to build up a large stockpile of the genuine article (one of the very few classes of actors for which counterfeiting is the easier solution), which has actually happened before. – Sean Nov 22 '18 at 1:21
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    @Sean true, but against that export bans on your currency also work. There'd be no easy way to get enough of the counterfeit currency into the country most likely (given that most such countries have pretty severe border control, and you'd need literally truckloads). So at the very least it makes it harder to introduce counterfeit currency into the place in amounts large enough to make a difference (and with import restrictions on printing presses you can make it much harder to produce on site as well). – jwenting Nov 22 '18 at 6:11

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