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IMF changes stand on capital controls

Updated - 21/3/2010 - hindu.com.

 

Should cross-border capital flows be restrained? Far from being an academic question, the idea of imposing controls on capital flows has been engaging policy makers in several emerging economies.

The debate over the need for such restraints has been there for a long time, at least since the fall of the fixed exchange rate system. It has gained a certain degree of urgency and topicality now. As the global economy comes out of the recession, large amounts of capital flows from the developed world are seeking investment avenues in the better performing emerging markets that, as a rule offer higher returns than in their home countries.

Footloose capital

During the intense phase of recession, footloose capital sought the safety of their home countries.

 

www.hindu.com/biz/2010/03/15/stories/2010031550041500.htm

 

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