Capital account convertibility - lessons from Chile's experience

Abstract

The report covers the progress on the topic till date. The scope of the mid term report covers: 1. Basic understanding of Capital Account Convertibility. It’s possible benefits and shortcomings. 2. Brief coverage of international financial crisis (namely Mexico & East Asian) 2. Studying the impact of financial crisis in countries of interest in shadow of the extent of Capital Account Liberalization in the countries. The countries selected are Chile and Brazil from Latin America and Thailand and Singapore from South East Asia. 3. Studying in depth the time line and extent of Liberalization in these countries and the before & after effects of major financial crisis on these countries. 4. Outline major learnings from the experiences of these countries The major parameters on which we have assessed the economies are: 1. Economy A Public Expenditure b. Current account deficit c. GDP Growth d. Export dependency 2. Monetary Policy a. Interest Rates b. Exchange rate c. Reserves 3. Banking and Financial System 5. In Indian context, study the findings of Tarapore Committee (97) and the prevailing conditions in the Indian Economy.