Rising tensions amid an escalating global currency war has sparked talk of capital controls, but such a move would be dire for markets, warned Mark Mobius, executive chairman of Templeton Emerging Markets Group on CNBC Friday.
"We could really move into a depression globally," Mobius said, should currency controls, trade wars and trade restrictions be implemented.
Fears of global currency and trade wars are now top of the agenda at IMF and World Bank meetings this weekend, Reuters reported. The Group of Seven meeting on Friday is also expected to focus on how to defuse currency tensions.
But with the U.S. Federal Reserve expected to introduce further quantitative easing measures, the flood of easy money is set to weaken the dollar and trigger an appreciation in other currencies.