Risks of Capital Controls Rising

A combination of rising global risk appetite, growing interest rate differentials, and strong recoveries in emerging markets continues to push emerging market currencies higher (see our online service, October 5, "EM Equities: Outperformance To Continue"). As the US dollar weakens, central banks in both developed and developing economies are becoming increasingly worried about the appreciation of their currencies against the greenback and their impact on export competitiveness.

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