Capital that is frequently transferred between financial institutions in an attempt to maximize interest or capital gain.
- Investors purchase shares on foreign stock markets or hold currency deposits at foreign banks, transferring large sums of hot money across frontiers as investor confidence or interest rates rise and fall.
- At the same time, the spread of financial liberalization has exposed developing nations to the promise and perils of export strategies financed by hot money.
- This editor firmly believes that exchange controls of some kind are often if not always useful for preventing hot money from destabilizing international financial markets.
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Syllabification: hot mon·ey
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