Foreign cash flies out of Malaysia
Tuesday 09 February 1999
The move followed Malaysia's recent lifting of a six-month ban on capital flows, to be replaced next week by a tax of up to 30 per cent on funds moved out of the country.
The flight of newly released money sent Malaysian shares tumbling 5.85 per cent in heavy trading. The fall dragged other stockmarkets in Asia lower too, with falls in Seoul, Bangkok, Jakarta and Hong Kong.
The switch from overt capital controls to a tax on movements of funds out of the country of up to 30 per cent - less on longer-term investments - was intended to encourage foreign investment, but backfired as those trapped by earlier restrictions made for the exit.
Although the recurrent financial crises of the past two years had persuaded a number of prominent economists that capital controls could be a useful policy in emerging markets, Malaysia was the only affected country to try them.
Its experience has now confirmed the view that any restrictions simply discourage foreign investment.
In pictures: Saturn images from Cassini probe as it prepares to turn lens towards Earth
New banker bonus boom: Payouts leapt 64% to new record when Chancellor George Osborne cut top-rate tax to 45p in April
'There's something quite unpleasant going on': Nigel Farage confronted for second time on visit to Scotland ahead of Donside by-election
Poor children are being let down by schools, warns Ofsted
World news in pictures
- 1 ‘Hello, NME? I’d like to complain about your Tom Odell review. Why? I’m his dad’
- 2 Richard Nieuwenhuizen death: Six teenagers and 50-year-old father convicted of manslaughter in shocking case of referee killed over a game of football
- 3 Exclusive: Newcastle United's star talent-spotter Graham Carr on brink as Joe Kinnear sparks walkout at St James' Park
- 4 Vast methane 'plumes' seen in Arctic ocean as sea ice retreats
- 5 From charmer to bully: My encounter with Charles Saatchi
iJobs Money & Business
Excellent Salary: Austen Lloyd: We have a very exciting opportunity with a maj...
£500 - £600 per day: Orgtel: FX Options Front Office Java / C# Developer - Ba...
£600 - £700 per day: Orgtel: Project Manager - Front Office - Regulatory IT C...
£600 - £750 per day: Orgtel: FATCA Project Manager - Banking - London - £600-...