China mulls hot money measures

China may issue a number of measures to keep hot money inflows at bay, Reuters reported, citing comments made by a central bank official which appeared in the state-backed Shanghai Securities News. Ma Delun, deputy governor of the People’s Bank of China, said Beijing could make use of a number of policies including adjustments to the reserve requirements, management of foreign exchange positions and open market operations. Earlier this month, PBoC Governor Zhou Xiaochuan said existing foreign exchange controls were effective in preventing irregular capital inflows and suggested the setting up of a “pool” of policies aimed at buttressing the government’s monetary tightening efforts. The central bank last week ordered an increase in reserve requirements for the country’s major banks as inflation reached a 25-month high in October, a move Ma described as aimed at reducing money supply to the real economy.