The Capital Flow Management in the Global Economy During the COVID-19 Pandemic and After the Russian Invasion of Ukraine – A Comparative Analysis

Abstract

This article analyses the evolution of capital flows management (CFM) measures in the global economy between 2017 and 2023, with particular attention to the COVID-19 pandemic and Russia’s invasion of Ukraine. Drawing on data from the IMF’s Annual Report on Exchange Arrangements and Exchange Restrictions (IMF AREAER), the study evaluates how different groups of economies: advanced, emerging market, developing and low‑income developing countries, used tightening and easing measures to manage capital inflows and outflows. The findings suggest a shift in the use of CFMs: from predominantly temporary, counter-cyclical instruments of liquidity management during the pandemic to more preventive and, in some cases, security-linked measures in the post-2022 geopolitical environment.

The analysis shows that emerging and developing economies displayed the highest policy intensity, while advanced economies increasingly integrated CFMs with investment screening and financial‑security policies. The findings are consistent with the IMF’s revised Institutional View in that they suggest a broader and more preventive role for CFMs within the macrofinancial policy toolkit, bridging monetary, prudential, and, in some cases, security-related objectives. By linking empirical evidence from the pandemic and wartime periods, this article contributes to the ongoing debate on the balance between financial openness and resilience. It argues that, in the context of geoeconomic fragmentation, capital flows management is increasingly being used not only as a stabilisation mechanism but also, in some cases, as a strategic instrument linked to national and systemic resilience.