IMF Working Papers

Managing Capital Flows: Lessons From the Experience of Chile

By Bernard J Laurens, Jaime Cardoso

December 1, 1998

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Bernard J Laurens, and Jaime Cardoso. Managing Capital Flows: Lessons From the Experience of Chile, (USA: International Monetary Fund, 1998) accessed November 21, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

As a result of the Asian crisis, methods of coping with volatile international capital markets have received considerable attention from observers and policymakers. It has been argued that the imposition by Chile of a nonremunerated reserve requirement on external borrowing played a useful role in the smooth liberalization of its capital account by allowing Chile to deal effectively with short-term capital inflows and thus to reduce its vulnerability to external shocks, and that such measures should be adopted by other countries. In light of this, this paper reviews Chile’s experience in managing capital flows and draws lessons for policymakers.

Subject: Balance of payments, Capital controls, Capital flows, Capital inflows, Exchange rates, Foreign exchange, Monetary policy, Reserve requirements

Keywords: Capital, Capital controls, Capital flows, Capital inflows, Chile, Contagion, Control, Exchange rate band, Exchange rates, Indexation mechanism, Interest rate, Interest rate differential, Monetary policy, Prudential framework, RER appreciation, Reserve requirements, WP

Publication Details

  • Pages:

    53

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 1998/168

  • Stock No:

    WPIEA1681998

  • ISBN:

    9781451858235

  • ISSN:

    1018-5941

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