China’s foreign exchange regulator said that speculative “hot money” inflows are putting pressure on the economy, with the volume of illegal currency exchanges rising by 26% in the first half of the year, Caixin reported. The State Administration of Foreign Exchange (SAFE) announced that 1,800 illegal exchange operations have been shut down so far this year, involving more than US$16 billion worth of currency. The organization said it will continue to monitor hot money inflows and crack down on illegal currency conversions. China’s current account surplus hit US$69.9 billion in the second quarter, while its capital account surplus rose to US$67 billion. The country’s foreign exchange reserves, managed by SAFE, increased by US$136.9 billion over the same period to reach US$3.2 trillion.
Hot money inflows soar 26%