Liu Wei, a director with the foreign exchange reserve manager, also said in an interview with Caing.com published on the SAFE website that the scale of speculative “hot money” inflows into China shouldn’t be exaggerated, but also that monetary policy tools will be mobilized to counter them.
He said that the Fed’s quantitative easing program may have some stimulus impact on the U.S. in the short term, but also that it could add to global inflation pressure and fuel asset bubbles “so that the global economic recovery and growth face greater uncertainty.”
The easing could hurt the European economies and other those of other developed countries and add to speculative inflows into the emerging markets.” Read more.
“China SAFE Offl: Fed Policy Could Fuel Global FX Intervention”
iMarketNews.com, January 10, 2011.
Image by renjith krishnan / FreeDigitalPhotos.net.