Yellen defends IMF proposals on capital controls

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Janet Yellen, the vice-chair of the Federal Reserve, on Friday backed the International Monetary Fund (IMF) line on when to implement capital controls.

The IMF last month released a document, Recent Experiences in Managing Capital Inflows-Cross-Cutting Themes and Possible Policy Framework, which proposed circumstances in which the use of capital controls is appropriate.

The document advised countries to allow their exchange rate to appreciate if it is undervalued, buy foreign exchange reserves,

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