Wall Street Journal Reports China's Interest Rate Hike Could Spur Capital Controls
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On Wednesday the Wall Street Journal reported that China's recent interest rate hike could spur nearby Asian nations to implement capital controls.
The daily financial paper said analysts believe central banks will be under pressure to respond but not 'via the interest-rate route' with the most likely candidates for capital controls being "highly export-dependent countries such as South Korea".
Bank of Korea officials said it would "gauge what's behind China's action" before responding.
With heavy inflows of foreign capital from the developed world seeking higher returns Asian nations are adopting measures to prevent asset bubbles.
Meanwhile others are seeing China's rate hike as a signal of confidence in the world economy.
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