Currency Controls Return as Central Banks Fight Dollar Freefall

[jk]

Currency Controls Return as Central Banks Fight Dollar Freefall
By Gavin Finch and Ye Xie
Nov. 12 (Bloomberg) -- Central banks from Bogota to Mumbai are imposing foreign-exchange curbs to take control of their soaring currencies from traders dumping the dollar.
In Colombia, international investors buying stocks and bonds must leave a 40 percent deposit at Banco de la Republica for six months. The Reserve Bank of India created a bureaucratic thicket to curb speculation by foreign money managers. The Bank of Korea is investigating trading of currency forward contracts to limit gains in the won, now at a 10-year high.
Instead of using currency reserves or interest rates to influence foreign exchange markets, central banks and finance ministries are setting up obstacles to keep the falling dollar from threatening company profits and economic growth. The U.S. currency slumped 10 percent this year against its biggest trading partners, the steepest decline since 2003, while Treasury Secretary Henry Paulson has reiterated that the U.S. supports a ``strong'' dollar.

etc



http://www.bloomberg.com/apps/news?p...8L0&refer=home

[Tulpen]

Re: Currency Controls Return as Central Banks Fight Dollar Freefall

More proof that emerging markets are far from ready for capitalism.

[touchring]

Re: Currency Controls Return as Central Banks Fight Dollar Freefall

I think they are trying to curb hot money inflows from the US. Everyone is playing the currency game.

[FRED]

Re: Currency Controls Return as Central Banks Fight Dollar Freefall

Currency Controls Return as Central Banks Fight Dollar Freefall
By Gavin Finch and Ye Xie
Nov. 12 (Bloomberg) -- Central banks from Bogota to Mumbai are imposing foreign-exchange curbs to take control of their soaring currencies from traders dumping the dollar.
In Colombia, international investors buying stocks and bonds must leave a 40 percent deposit at Banco de la Republica for six months. The Reserve Bank of India created a bureaucratic thicket to curb speculation by foreign money managers. The Bank of Korea is investigating trading of currency forward contracts to limit gains in the won, now at a 10-year high.
Instead of using currency reserves or interest rates to influence foreign exchange markets, central banks and finance ministries are setting up obstacles to keep the falling dollar from threatening company profits and economic growth. The U.S. currency slumped 10 percent this year against its biggest trading partners, the steepest decline since 2003, while Treasury Secretary Henry Paulson has reiterated that the U.S. supports a ``strong'' dollar.

etc



http://www.bloomberg.com/apps/news?p...8L0&refer=home

"One of the things investors have learned about emerging markets recently is that they are hard to emerge from in an emergency."
- Robert Hormats, reflecting on the economic crisis in Mexico in 1995

[GRG55]

Re: Currency Controls Return as Central Banks Fight Dollar Freefall

More proof that emerging markets are far from ready for capitalism.

Maybe they are ready for capitalism. Just not the form of capitalism that is practised on Wall St...