Use and Liberalisation of Capital Controls: Country Experiences and Issues

This paper reviews the issues involved in the use and liberalisation of capital controls, as experienced by some of the IMF member countries. Apart from reviewing the nature and scope of capital controls, it delves into the theoretical considerations in the use of capital controls, speed and sequencing of capital account liberalisation in the crisis-hit economies of Indonesia, Korea and Thailand. Lastly, it examines the crucial role of prudential regulation and a consistent monetary and exchange rate policy in the sequencing of liberalisation.