01939cas a2200265 a 4500 AALejournalIMF003408 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451975451 1934-7456 BD-DhAAL BD-DhAAL Prasad, Eswar. Putting the Cart Before the Horse? : Capital Account Liberalization and Exchange Rate Flexibility in China / Eswar Prasad, Qing Wang, Thomas Rumbaugh. Washington, D.C. : International Monetary Fund, 2005. 1 online resource (32 pages) IMF Policy Discussion Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper reviews the issues involved in moving towards greater exchange rate flexibility and capital account liberalization in China. A more flexible exchange rate regime would allow China to operate a more independent monetary policy, providing a useful buffer against domestic and external shocks. At the same time, weaknesses in China's financial system suggest that capital account liberalization poses significant risks and should be a lower priority in the short term. This paper concludes that greater exchange rate flexibility is in China's own interest and that, along with a more stable and robust financial system, it should be regarded as a prerequisite for undertaking a substantial liberalization of the capital account. Mode of access: Internet Rumbaugh, Thomas. Wang, Qing. IMF Policy Discussion Papers; Policy Discussion Paper ; No. 2005/001 Full text available on IMF http://elibrary.imf.org/view/journals/003/2005/001/003.2005.issue-001-en.xml IMF e-Library