Zhou Xiaochuan: Put the influx of hot money into the pool

Source: Internet
Author: User
Keywords Zhou Xiaochuan hot money put in pool
China will adopt total hedging to deal with the short-term speculative capital of entry, but it is impossible to eliminate the arbitrage "Caixin Net" (reporter Li Tao) RMB revaluation is again a possible trend, whether China will have more hot money inflow, what should be done? Zhou Xiaochuan, governor of the People's Bank of China, November 5 at the 2010 Finance Summit: China and the world, in an opening speech, answered these questions from two perspectives: first, China's current foreign exchange system is a system of management of capital projects, and irregular capital projects are either inaccessible or have to be taken by a detour.  For the bypass, China will try to take some management measures to prevent this behavior as much as possible. "In the absence of spreads in the market, arbitrage is logical in itself, not too much to blame and not completely regulated," he said.  Mr Zhou said. Mr Zhou said China could take measures to hedge its gross amount in other words, if the short-term speculative capital inflows, through this measure put it in a pool, and the flood of the entire Chinese real economy to go, "and so it needs to retreat, put it out of the pool, let it go."  "In this way, the impact of abnormal capital flows on China's economy will be reduced to a large extent." Zhou Xiaochuan, taking the common two-way merchants of the late 70 and early 80 as an example, expounds the attitudes towards short-term capital inflows. "It is not possible to prevent the train from running because of the two-way merchants of long-distance traffic." Otherwise, the cost to the entire national economy is much greater than the cost of renovating the two-way merchants.  "He also takes the Carry trade, which has prevailed over the past few years, to say that a large number of participants are Japanese housewives, not planned speculation or government action, which is difficult to regulate." "Let these short-term investment arbitrage to make money, we are very unbalanced." But the cost must be measured. Mr Zhou explained that China tried to prevent speculative acts, but it was not possible to completely eliminate arbitrage opportunities. For China, the most important thing is to keep the macroeconomic balance to protect against all kinds of risks.
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