Restrictions on Cross-border Capital Flows: Evolution of the IMF’s Position and Key Trends

The article describes the evolution of the International Monetary Fund’s position regarding restrictions on cross-border capital flows. The prerequisites of transition from one stage of evolution to another are discussed. Specific attention is paid to the adjustments of the IMF’s position after the Asian financial crisis and the global financial crisis of 2008–2009. There has been a revision of perceptions about the benefits and risks of moving towards a more open capital account. Particular attention is paid to the period after 2012, when the institutional approach to capital controls was proposed. Since then, it has defined the IMF's position with some additions and adjustments. Taking into account this institutional view, the experience of individual countries’ imposition of cross-border capital flow restrictions during the COVID-19 pandemic is examined. Moreover, using data from AREAER reports and de jure capital mobility indices, this paper attempts to identify the main trends in capital account restrictions for different groups of countries depending on their income levels and initial capital mobility. Conclusions are drawn about the possible reasons for changes in the IMF’s stance, as well as on the specifics of capital mobility faced by particular groups of countries. This is particularly relevant for Russia due to the capital controls introduced in 2022.