As a country begins to liberalize its capital account, what would you expect to happen to the difference between the interest rates for similar assets in this country and another country with open capital markets?

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Liberalizing the capital account typically leads to a convergence of interest rates between countries as capital flows more freely, seeking the best returns. This increased mobility of capital reduces the difference in interest rates for similar assets across countries.

As a Country Begins to Liberalize Its Capital Account, What