Jump to ContentJump to Main Navigation
The Great RecessionLessons for Central Bankers$
Users without a subscription are not able to see the full content.

Jacob Braude, Zvi Eckstein, Stanley Fischer, and Karnit Flug

Print publication date: 2013

Print ISBN-13: 9780262018340

Published to MIT Press Scholarship Online: January 2015

DOI: 10.7551/mitpress/9780262018340.001.0001

Show Summary Details
Page of

PRINTED FROM MIT PRESS SCHOLARSHIP ONLINE (www.mitpress.universitypressscholarship.com). (c) Copyright The MIT Press, 2017. All Rights Reserved. Under the terms of the licence agreement, an individual user may print out a PDF of a single chapter of a monograph in MITSO for personal use (for details see http://www.mitpress.universitypressscholarship.com/page/privacy-policy).date: 17 December 2017

Capital Inflows and Policy Responses: Lessons from Korea's Experience

Capital Inflows and Policy Responses: Lessons from Korea's Experience

Chapter:
(p.187) 7 Capital Inflows and Policy Responses: Lessons from Korea's Experience
Source:
The Great Recession
Author(s):

Kyuil Chung

Seungwon Kim

Publisher:
The MIT Press
DOI:10.7551/mitpress/9780262018340.003.0008

In response to a capital inflow surge from early 2000 through 2007, Korea adopted several policy measures. Of those measures, this chapter evaluates the effectiveness of the capital outflow liberalization and of the accumulation of foreign reserves. In order to neutralize the excess supply of foreign exchange, Korea lifted most of the restrictions on residents’ investments abroad. Korea also conducted smoothing operations in the foreign exchange market to mitigate the exchange rate volatility, and thereby built up its foreign reserves. However, it appeared that Korea's capital outflow liberalization eventually resulted in the increase of external debt and foreign reserves were used within a limited boundary because of “fear of losing reserves.” All these provide valuable lessons to other EMEs.

Keywords:   Capital outflow liberalization, Currency hedging, Foreign reserves, Foreign exchange market intervention, Central bank swap, Korea

MIT Press Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us.