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IMF Reverses Position on Capital Controls

Wall Street Journal Original article ›

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The IMF's Managing Director Dominique Strauss-Kahn, says the Fund is taking a very pragmatic view of capital controls. Because of large capital outflows from developed economies in the West to emerging market countries, this has become a much discussed issue. In the past the IMF has supported open flows, but this has created serious problems for some countries. Strauss-Kahn says that with the right economic policies in place, it can be a good idea on a temporary basis to use the tool of capital controls and prevent damaging economic distortions.

The IMF's changing position on the use of capital controls

04/05/2011

Capital controls can be a useful tool on a temporary basis, when the right economic policies are in place. This would help to prevent damaging economic distortions from taking place, especially with the large inflows of capital into emerging market countries after 2008.

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