Just days before the G20 summit in Toronto, South Korea and Indonesia announced several policy measures to regulate potentially destabilising capital flows which could pose a threat to their economies and financial systems. The policy measures announced by South Korea and Indonesia assume greater significance because both countries are members of the G20. In 2010, South Korea chairs the G20.
On 13 June 2010, South Korea announced it would be imposing currency controls which are much wider in scope than foreign exchange liquidity controls announced earlier in 2009. The policy measures have three major components:
Within three days of South Korea imposing currency controls, Indonesia (a member of G-20) unveiled several policy measures to regulate potentially destabilizing capital flows. The policy announcement by Indonesia is the latest initiative by emerging markets to tame speculative money which could pose a threat to their economies and financial systems.
On June 16, 2010, Bank Indonesia, country’s central bank, announced the following policy measures:
1. To make short-term investments less attractive, there will be a one-month minimum holding period on Sertifikat Bank Indonesia (SBIs) with effect from July 7,…
On June 13, 2010, South Korea announced a series of currency controls to protect its economy from external shocks. The new currency controls are much wider in scope than foreign exchange liquidity controls announced earlier in 2009.
The imposition of currency controls by the Korean authorities has to be analyzed against the backdrop of the global financial crisis. Despite its strong economic fundamentals, South Korea witnessed sudden and large capital outflows due to deleveraging during the global financial crisis. It has been reported…
The massive investments by private equity firms coupled with an initial public offer (IPO) by SKS Microfinance have ignited a debate about the ethics and objectives of microfinance institutions (MFIs) in India.
The SKS Microfinance, the largest MFI in India with substantial investments by private equity firms and hedge funds, is planning to raise Rs.11000 million ($250 million) through an IPO. According to media reports, the original promoters of SKS Microfinance have sold part of their stake to a hedge fund thereby making a…
By Kavaljit Singh | Jointly Published by Madhyam and FERN | March 2010
With the onset of the global financial crisis and the subsequent squeeze in credit and insurance markets, there is a renewed global demand for export credit and investment insurance products offered by ECAs. Despite previous predictions of the demise of official ECAs, the current global financial crisis has reasserted their position as dominant players in the trade finance markets as they have stepped-in to fill the huge gap left by the private market.
The financial crisis has dramatically changed the…
