According to economic theories, reduced capital flow restrictions may:

Reduced capital flow restrictions can enhance international trade by facilitating the movement of capital across borders, thereby allowing for more investment in foreign markets and broader access to goods and services. When barriers to capital movement are lowered, businesses can invest in supply chains and operations in other countries more easily, which can lead to increased efficiency and production. This influx of capital helps to promote trade relationships as firms seek out new markets for their products, leading to a more interconnected global economy.

In contrast, increased tariffs would be more likely to restrict trade rather than enhance it, as tariffs impose additional costs on imported goods, discouraging trade. Exchange rate manipulation is a separate concern that typically addresses a government’s interference in the market, often when economies impose restrictions. Lastly, while reduced capital flow restrictions can potentially lead to greater economic stability, it does not guarantee stabilization of domestic economies due to the complex interplay of various economic factors. Thus, the most relevant outcome of reduced capital flow restrictions is the enhancement of international trade.