This paper reviews the issues involved in moving towards greater exchange rate flexibility and capital account liberalization in China. A more flexible exchange rate regime would allow China to operate a more independent monetary policy, providing a useful buffer against domestic and external...

This paper documents trends in movement and composition of capital flows into India in a comparative perspective, examines the impact of these flows upon key macroeconomic variables in the economy, and dwells on implications for economic policy. We find that an inflow of foreign capital results...

This paper discusses the forces driving capital flows in the transition countries of Central and Eastern Europe (CEE). It argues that various influences—specifically, the real exchange rate history and trend and the factor intensity of production—can combine to motivate very large capital...

This paper outlines a “modern” approach to managing risks in cross-border capital movements that is consistent with an environment of increased and liberalized capital flows. Key elements of this approach include: a consistent monetary and exchange rate policy mix to avoid incentives for...

This paper reviews the experience with capital controls in industrial and developing countries, considers the policy issues raised when the effectiveness of capital controls diminishes, examines the medium-term benefits and costs of an open capital account, and analyzes the policy measures that...

The Selected Issues paper on Poland underlies that as the only European Union economy to avoid outright recession during the crisis, Poland is likely to attract renewed risk appetite. Poland could become one of the main recipients of capital inflows. This could lead to excessive exchange-rate...

The Mexican, Asian, and Russian crises of the mid- and late 1990s have renewed interest among policymakers in the determinants and effects of private capital inflows. This paper analyzes whether policies can affect the composition of capital inflows and whether different compositions aggravate...

The member countries of the International Monetary Fund collaborate to try to assure orderly exchange arrangements and promote a stable system of exchange rates, recognizing that the essential purpose of the international monetary system is to facilitate the exchange of goods, services, and...

The staff report for the 2007 Article IV Consultation highlights the Russian Federation’s long-term perspective, economic developments, and macroeconomic policies. Russia’s economic growth remains robust. High oil prices and sound fiscal policy underlie Russia’s long spell...