Europe may send hot money to China
By Cecily Liu in London | China Daily | Updated: 2015-03-02 06:59
Dramatic monetary policies in Europe have lots of potential to create a new surge of hot money inflow into China, says Simon Derrick, chief currency strategist at the Bank of New York Mellon.
Hot money is speculative money that flows quickly between markets as investors cast about for high interest rates and returns. It can create distortions in sufficient quantity.
This impact is similar to that caused by quantitative easing by the US Federal Reserve on China in 2009, when excess money created was looking for a home in a high growth economy, Derrick says.
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