The IMF work that I mentioned earlier concludes that capital controls may be appropriate in conjunction with other policy tools as long as countries meet certain conditions. Foreign currency reserves should already be adequate, and exchange rates should not be undervalued.
Controls should not be used as a substitute for necessary macroeconomic policy adjustments; for example, if the economy is overheating, controls should only be used along with a suitable monetary-fiscal policy mix. Moreover, controls should be lifted once these prerequisites no longer apply.10 In addition, the IMF's work encourages countries to turn to macroprudential tools before making use of capital controls.