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Capital Control

Capital Control Definition

Capital Control means restriction of the free movement of capital. It consists of measures taken by a government to limit the flow of foreign capital in and out of the country. The methods of capital control can be taxes, tariffs, legislation and volume restrictions. The measures can be applied to various asset classes such as equities, bonds and foreign exchange trades. The strictest capital controls are introduced in developing countries, where the capital reserves are lower and more vulnerable to volatility.



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