capital controls

Frederick Searby says that Brazil has the opposite problem of the developed economies in that it is dealing with overheating and inflation while the developed economies have a serious deflationary undertow. His view is that if there is a…

It is very clear that Brazil is moving further and further away from the orthodox model due to its obsession with the strong real. While the IMF said today in its Article IV discussions with Brazil that capital controls are an “appropriate”…

The global crisis has brought many countries to their knees, none more so than the small island of Iceland whose losses amount to seven times its GDP. Yet while Iceland’s recovery has in many ways been remarkable, this column argues that…

Victor Shih argues that Chinese FX reserves are vulnerable and that raising real interest rates are key to reducing the potential risk. Video and PDF presentation provided.

By Win Thin Brazil Finance Minister Mantega announced macroprudential measures today, raising the IOF tax on consumer credit by 150 bp from 1.5% to 3% in order to help limit credit growth. So far, measures already taken are not working…

By Win Thin Brazilian Finance Minister Guido Mantega announced new FX measures at his press conference, but at first blush are quite underwhelming. The 6% IOF tax on local entities was extended for overseas loans with maturities up to 2…

By Win Thin Local Brazil analysts are saying that new measures to curb currency appreciation are basically ready to go. Finance Minister Mantega has reportedly not decided yet if he is going to release details today or not, and that he is…

by Win Thin Bank Indonesia kept rates steady at 6.5%, as expected. However, we disagree with its dovish stance. Inflation pressures are rising, and tightening should have begun in 2010. Headline inflation was 7.0% y/y in December, the…

Stephen Roach argues that the U.S. is not equipped to turn the Fed's liquidity into domestic demand so the liquidity provided by quantitative easing will simply leak out abroad to form asset bubbles somewhere else. He is principally…