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ID: 057995

Explaining capital account liberalization in Latin America: a t / Brooks, Sarah M

April 2004 Journal Article

Brooks, Sarah M	Journal Article
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Publication

April 2004.

Key Words

Trade ; Latin America ; Liberalization ; Capital Account

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ID: 077185

Opening China's capital account: modeling the capital flow response / Laurenceson, James; Tang, Kam Ki

Laurenceson, James	Journal Article
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Publication

2007.

Summary/Abstract

Capital account convertibility in China is on the rise. In this paper we consider the impact that removing remaining capital controls might have on the volume of China's international capital flows. Better understanding of this capital flow response can shed light on China's current degree of international financial integration, which has important implications for policy decisions such as whether China should move toward a more flexible exchange rate regime. It is also relevant to discussing the financial stability consequences of removing remaining capital controls. The main finding is that China's capital account is already quite open, thus implying a tradeoff presently exists between exchange rate stability on the one hand and monetary independence on the other. In terms of financial stability, the results generally serve to allay fears that further opening the capital account would compromise China's international payments ability or disrupt global capital flows.

Key Words

Capital Account ; China - Captil Market

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ID: 152268

Policy challenges in maintaining renminbi stability in China / Chan, Sarah

Chan, Sarah	Journal Article
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Summary/Abstract

This paper examines the policy challenges and dilemmas faced by China’s authorities in balancing exchange rate stability with the policy necessity of monetary autonomy. China will have to move toward greater exchange rate flexibility, particularly as the capital account becomes increasingly liberalized and the government pushes forward with RMB internationalization.

Key Words

Exchange Rate ; Renminbi ; Capital Account ; Impossible Trinity ; Monetary Autonomy

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ID: 074183

Robust monetary framework for China / Ito, Takatoshi

Ito, Takatoshi	Journal Article
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Publication

2006.

Summary/Abstract

China faces rising current account surpluses and foreign reserves. Maintaining the fixed exchange rate runs the risk of overheating of the economy. It is desirable to pursue greater flexibility of the exchange rate regime in the short run, and gradual liberalization of capital account transactions in the medium run. Proper sequencing of various steps is recommended to prevent financial crises. Japan's transition from the dollar peg to a more flexible exchange rate system in 1971–1973 is considered to be a mistake, whereas the gradual capital account opening from the mid-1970s to mid-1990s is considered a success. The present study also analyzes Korea's mistake in opening its capital markets too far ahead of exchange rate flexibility, and liberalizing short-term capital rather than long-term capital. The challenge before China is similar to Japan's of 1969–1970, in the sense that the transition from the dollar peg is inevitable and desirable for the country, but decisive actions with proper sequencing are important.

Key Words

Japan ; China ; Korea ; Financial Crisis ; Exchange rate regime ; Capital Account

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