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Surging Capital Flows to Emerging Asia: Facts, Impacts, and Responses
Author: Sylwia Nowak, Mr. Sanjaya P Panth, Mr. Ravi Balakrishnan, and Mr. Yiqun Wu
Series:
IMF Working Papers
Volume/Issue:
Volume 2012: Issue 130
Language:
English
Publication Date:
01 May 2012
DOI:
https://doi.org/10.5089/9781475503821.001
ISBN:
9781475503821
ISSN:
1018-5941
Pages:
28
Keywords:
WP; ED142; financial crisis; Indonesia; Thailand; net capital; Asia; capital inflows; macroprudential policy; interest rate; net capital flow; portfolio equity; equity ratio; IMF staff calculation; portfolio debt; central bank; portfolio flow; Capital flows; Global financial crisis of 2008-2009; Balance of payments statistics; Private capital flows; Asia and Pacific; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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Net capital flows to emerging Asia rebounded at a record pace following the global financial crisis, raising concerns about overheating and financial stability. This paper documents the size and composition of the most recent surge to Asian emerging markets from a historical perspective and compares developments in the broader economy, asset prices, and corporate variables across the different episodes of strong inflows. We find little evidence of a significant build-up of imbalances and resource misallocation during the most recent surge. We also review country experiences in managing the risks associated with inflows and argue that Asian countries have used regulatory measures during past surges, although there is not strong evidence of their efficacy without supporting monetary and fiscal policies.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund