In the open economy IS-LM-BB model, does a capital outflow reduce the domestic money supply?

I think it does as a capital outflow - ie buying foreign bonds would increase the foreign country's reserves of £ (the domestic currency) but is an outflow of money (and therefore would crowd out an open market operation ie purchase by the government of domestic bonds from the Non Bank Private Sector aimed at increasing the money supply).

Can anyone confirm this?

Answer:
I would agree. A capital outflow in an IS-LM-BB context is likely to be because of higher interest rates relative to other countries interest rates, in which case investment will flow to these other countries which will need to be exchanged in their currency (unless it is a Euromarket transaction) This will lead a reduction in the domestic money supply. However this may also cause another crowding out effect as a decrease money supply will drive up the domestic interest rate leading to an inflow of funds.

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In the open economy IS-LM-BB model, does a capital outflow reduce the domestic money supply?

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