The aim was to reassure investors, and so prompt capital inflows and lower interest rates.
Prudential controls on capital inflows certainly make sense, particularly when domestic banks are weak.
But capital inflows help to make the real stronger, which is hard on exporters.
Mr Eichengreen, for instance, wants emerging economies to discourage short-term capital inflows to minimise exchange-rate volatility.
He said capital inflows would be "more or less" adequate to cover the current account gap.
And it seems likely that large capital inflows contributed to the overvaluation of Western assets.
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In an ideal world I suppose Russia would enjoy robust private sector capital inflows.
Chile was trying to deter short-term capital inflows in the early 1990s, for example.
Further, there were fewer capital inflows into the country in 2012 than 2011, he continued.
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Capital inflows picked up too, though they were already running at an alarmingly high level.
Sterilization in economic terms means a Central Bank is spending time and treasure managing capital inflows.
Another measure: Asia's central banks are again scooping up capital inflows and putting them into foreign-currency reserves.
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That would allow a bit more flexibility against the dollar and help to discourage speculative capital inflows.
Part of the reason is that capital inflows have gone mainly to finance its persistent current-account deficit.
If the levy on bank accounts is approved, it would reduce spending power and likely deter capital inflows.
Alternatively, a surplus country wanting to avoid the inflationary consequences of capital inflows might revalue its currency upward.
Rising oil prices, strong global growth and booming capital inflows meant that investors soon forgot about the affair.
America, in turn, has been overly reliant on foreign capital inflows, so as to finance its record current-account deficit.
And we have supported the possible use of market-based measures to control capital inflows, for instance along Chilean lines.
At present, however, most debate about controlling capital inflows is beside the point.
Moreover, foreign direct investment accounts for four-fifths of all capital inflows to China.
Nevertheless, a large deficit does mean that an economy and its currency may struggle if foreign-capital inflows suddenly dry up.
No official announcements have been made, but analysts expect either a rate cut or other moves to stem capital inflows.
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Emerging markets have received record capital inflows as investors bet on the rapid industrialization of nations striving to become modern.
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One popular approach has been to impose controls on capital inflows by, say, introducing a tax on foreigners purchasing equities.
And foreign capital inflows into India are much more of the volatile-portfolio nature than the fdi inflows that go into China.
First, it is more exposed to the global credit crunch as a result of its previous reliance on large capital inflows.
The country has been relying on capital inflows to bridge this gap.
IMF, point favourably to Chile as a country whose financial stability may come, in part, from its restrictions on short-term capital inflows.
But this encouraged investors to bet on future appreciation, exacerbating capital inflows.
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