Global thinking on capital controls, or the more politically correct capital flow management measures (CFMMs), has changed considerably over the past few years. Many countries, primarily emerging market economies (EMEs), were always extremely sceptical of the earlier, rather categorical "capital controls are bad" view.

Subir Gokarn, Director of Research (designate), Brookings India, and former Deputy Governor, Reserve Bank of India, says: "The view that CFMMs might be appropriate in certain circumstances essentially emerged in the context of large and potentially destabilising inflows into EMEs, at a time when the central banks of advanced economies were infusing liquidity into their financial systems. The most dramatic characterisation of the spillovers from these actions was the "currency wars" expression by the Brazilian finance minister in late 2010." Read More

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