(Bloomberg) -- As the number of countries going into lockdowns to fight the coronavirus pandemic increases, emerging markets may institute capital controls, according to Citigroup Inc.

“There’s a decent case to make that we might be approaching a world in which policy makers start to restrict the movement of capital in just the same way that they are restricting the movement of people and goods,” David Lubin, London-based head of EM economics, said in a note on Wednesday. “Experiments with capital controls, in other words, are probably a step closer to us.”

Outflows from developing-nation bond and equity funds in the past two weeks have been close to 4% of net asset value by some accounts, larger than during the May 2013 Taper Tantrum and the September 2008 collapse of Lehman Brothers Holdings Inc., Lubin wrote. Just this month, currencies in Brazil, Indonesia, Colombia, Russia, and Mexico all slumped more than 10% against the dollar.

Argentina implemented capital controls last year to halt a slump in reserves and the peso, though it is scarcely alone among emerging markets in using them to stop money flying out in times of stress. Malaysia had adopted restrictions on capital during the 1997 crisis that were panned at first, but much later acknowledged by International Monetary Fund officials as being ahead of the curve.

Read: From Argentina to China and India: A Guide to Capital Controls

While most large emerging economies look well positioned to weather a normal crisis, with current-account deficits in check and plentiful foreign-exchange reserves, there is nothing standard about this virus crisis and existing tools may not be enough, Citigroup said in the note.

Textbook economics suggest protecting domestic economies require lower interest rates, but higher rates are needed to prevent large capital outflows, especially if debt burdens are rising, posing a conundrum to policy makers.

“The only way to resolve this contradiction, in principle, is to close the capital account,” Lubin wrote. “‘The longer the virus stays with us, the more capital mobility across EM might be threatened.”

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