Emerging Nations Reject Capital Plan

IMF Delays Program to Help Countries Manage Short-Term Inflows; as Geithner Blames China, Others Blame the Fed

Sudeep Reddy
The Wall Street Journal

WASHINGTON—Representatives of emerging nations rebuffed an International Monetary Fund plan to guide them on managing huge flows of capital into their economies, viewing it as a way to constrain their actions rather than help.

The IMF’s policy-steering committee, at its spring meeting over the weekend, responded by effectively delaying the plan, which would influence the use of capital controls—tools such as taxes and restrictions on foreign investment. The committee agreed to study the issue more in coming months.

The IMF’s recent endorsement of capital controls marked a reversal in its longstanding opposition to limits on the free flow of capital …

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