经济学人常用术语 | Hot money

Hot money

Short-term capital that flows into a country in search of quick returns. Hot money tends to flow through the banks, leading to a lending spree that causes speculation in the property market. It also drives up the country’s currency, making life more difficult for its exports. When sentiment turns, hot money flows out, causing the currency to slump, bursting any speculative bubbles and leading to a banking crisis. Nations prefer to rely on foreign direct investment, which is more permanent.