Hot Money/Refugee Capital-about hot money
what is hot money?
International short-term speculative movement of funds is mainly to avoidPolitical Risk, The pursuit of exchange rate movements, important changes in commodity prices and international price movements of securities interests, namely, the pursuit of hot moneyRateChanges in the interests of speculative behavior. When speculators expect the price of a currency will fall, while the sale of the forward foreign exchange currency with a view to the future after the expiry, you can buy a lower spot foreign exchange earned by the difference in this one's interests. Because of this speculation is purely fictitious, and hence different arbitrage. In the foreign exchange market, the result of such speculative funds often tend to devalue their ownMoneyConverted into an appreciation of the currency tend to currency, an increase of , The foreign exchange marketInstability, therefore, as long as the expected psychological presence, only an appreciation of the currency fluctuations or the introduction of exchange controls in order to prevent such speculative flows.
Hot money - high feature
1, high profitability and risk. Pursuit of high returns is the hot money in the global Financial markets Movement's ultimate goal. Of course, often accompanied by high-yield high-risk, and therefore a high risk of hot money earn profits, they may earn in this market, while in Peru market losses, or make money at this point deficit in the wound up, which it has undertaken high-risk awareness and ability.
2, high technology and sensitive information.Hot money is the darling of the information age, to a country or the world economic and financial status and trends of the exchange differences on the various financial markets, spreads and a variety of price differential on the relevant country's economic policy is highly sensitive, and can quickly reflect the .
3, high liquidity and short-term.Information based on high and high sensitivity to make money then they can quickly access and increased risk is an instant escape. Showed great short-term, and even ultra-short-term, in a day or week in and out quickly.
4, the high investment in the virtual sex and speculative.That hot money is a kind ofInvestment funds, Mainly referring to their investment in global securities markets and currency markets in order from the Securities and currency daily, hourly, per minute price fluctuations to achieve profits, namely, "Money begets money," the financial markets have a certain lubrication. If the financial market is not hot-money type of risk preferences, a risk averse person can not transfer risk. But the hot money of the investment is neither employment creation nor the provision of services, with a great virtual sex, speculative and destructive.
