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Modest controls on capital inflows are one way to keep such speculators in check.Over the past year most countries in emerging Asia (with the exception of Vietnam) have allowed their currencies to strengthen somewhat against the yuan, even as China has allowed the yuan to rise against the greenback.
Increasingly countries are turning to controls on capital inflows.
They reject a Brazilian-style tax on capital inflows.
Meanwhile the markets' confidence (vital for Turkey, which depends on capital inflows) has been shaken.
Several emerging economies will reintroduce or strengthen controls on capital inflows.
One way to regain control of interest rates is to impose tougher temporary restrictions on capital inflows.
Similar(30)
Even Chilean-type restrictions on capital inflow - aside from being a conspicuous locking of the barn door long after the horse has gone - are not likely to do much to prevent future crises.
We, therefore, attempted to empirically examine the role of liberalization on capital inflow.
"The country was dependent on capital inflow, which came through loans to its property market," said Klyviene.
Strengthening the prudential framework can help mitigate the adverse consequences of surging capital inflows, but other options--notably controls on capital inflows--may also need to be considered.
Prior to 1914, a growth strategy based on openness to capital inflows, frontier expansion, and the strong pursuit of comparative advantage based on primary exports carried the country to very high levels of income per capita income.
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