Emerging market economies often face acute challenges in the wake of sudden bouts of market volatility triggered by sharp capital outflows. Managing such turbulence—particularly when macroeconomic fundamentals offer limited support—requires a calibrated mix of conventional and unconventional policy responses. There is rarely a textbook solution to crises of this nature; central banks must deploy all available instruments with agility, while maintaining credible and consistent communication to anchor expectations.
Tag Archives: Capital flows
Financial Stability, Macroeconomics and Monetary Policy
How can Emerging and Frontier Markets in Asia attract Global Cross-Border Capital Flows for their Climate Transition?
03
Jul
Jul
“To reach net-zero greenhouse gas (GHG) emissions by 2050, entities operating in most sectors must undergo a major transformation. The key tool that will enable this transformation is the development of a transition plan that is science based, coherent, comprehensive, transparent and covers all material scopes of emissions and business activities.” CBI Report on Scaling […]
25
Mar
Mar
Capital flows and their volatility present challenges for economic policy makers. They can exacerbate economic cycles. Their outflows can lead to costly “sudden stops”. One particular form of capital flows, namely foreign direct investment (FDI) has been regarded differently compared to other forms of capital flows like debt and portfolio flows. First, unlike foreign portfolio […]