IMF Warns On Emergng Market Currency Controls |
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July 11, 2010
Tighter capital controls in Asia and Latin America should only be used to combat short-term surges in investment and must not become permanent, Dominique Strauss-Kahn, the managing director of the International Monetary Fund, warned yesterday.
Tighter capital controls in Asia and Latin America should only be used to combat short-term surges in investment and must not become permanent, Dominique Strauss-Kahn, the managing director of the International Monetary Fund, warned yesterday.
Mr Strauss-Kahn said he was sympathetic towards emerging countries that imposed such controls temporarily as a last resort against a flood of investors pumping up inflation and asset bubbles.
“You have to be very pragmatic. Long-term capital controls are certainly not a good thing,” he told the Financial Times. “But short-term capital controls may be necessary in some cases: it is a matter of balancing the costs of different options.”
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