Analyses | 15 February 2008

Central banks and capital flows

Sudden capital outflows were at the heart of the 1997-8 Asian Crisis. Ten years later, capital flows are back on the policy agenda, but in a very different context. The countries of East Asia are now getting more inflows than they can effectively absorb and the upward pressure on exchange rates is unwelcome.  

Stephen Grenville

  • Stephen Grenville

Sudden capital outflows were at the heart of the 1997-8 Asian Crisis. Ten years later, capital flows are back on the policy agenda, but in a very different context. The countries of East Asia are now getting more inflows than they can effectively absorb and the upward pressure on exchange rates is unwelcome.  

Stephen Grenville

  • Stephen Grenville
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Executive Summary

These issues are discussed in this paper, 'Central banks and capital flows', by Dr Stephen Grenville, in the Lowy Institute's Working Paper in International Economics series.