Michael writes on currency speculation in today’s Financial Times – Capital controls will follow the weak dollar.
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Two weeks ago Brazil moved to deter speculators from pushing up its currency, doubling the tax on foreign investment in its government bonds. Last week Thailand acted on similar lines by no longer exempting foreign investors from paying a tax on its bonds, with the Thai finance minister warning of more to come. As the dollar falls and developing nations see speculators push up their exchange rates, other countries are also discussing more stringent restrictions. A damaging age of capital controls seems likely.