Financial Times FT.com

How Beijing hit back against hot money

By Richard McGregor

Published: October 20 2006 01:49 | Last updated: October 20 2006 01:49

Every few weeks, the People’s Bank of China steps into the domestic financial markets to keep the local currency stable, buying dollars coming into the country and then draining the extra renminbi out of the system by selling bank bills.

But in recent months, the money flooding into China has started to look very different from previous years, when many Chinese as well as foreigners were bringing money into the country, betting on a sharp revaluation of the renminbi.

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