IMF adopts view on capital controls

Dec 05 2012, 01:10 IST
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SummaryThe IMF emphasised it new “institutional view” was not mandatory and said whether or not a country follows them would have no bearing on IMF financing decisions

The International Monetary Fund on Monday unveiled principles for how countries should manage international capital flows, agreeing that some measures to limit an influx of capital can be useful but should be targeted, transparent and temporary. Emerging markets have blamed loose monetary policies in rich nations for spurring destabilising flows of hot money, and the IMF is trying to forge a consensus on when it makes sense to resort to capital curbs.

The IMF emphasised it new “institutional view” was not mandatory and said whether or not a country follows them would have no bearing on IMF financing decisions. The IMF broke from its position that regulating capital flows was bad in 2010. Since then, it has tried to forge rules of the road for capital flows management, but its membership is divided over what those rules should be.

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