When the amount of speculative capital in these markets overwhelms their usage by farmers and commercial firms, speculation itself has the opportunity to drive prices.
Foreign direct investment is much safer than speculative capital.
Yet this largely reflects speculative capital inflows lured by the expectation of a currency revaluation.
The increase in reserves, he argues, partly reflects speculative capital inflows.
Foreign direct investment (FDI) is less volatile than speculative capital inflows.
Moreover, the franc zone is particularly attractive to speculative capital inflows.
Those nations' domestic economies are attracting floods of speculative capital seeking higher interest rates and are at risk of overheating.
That would allow a bit more flexibility against the dollar and help to discourage speculative capital inflows.
Ironically, the destabilising effects of speculative capital mobility have done huge damage to the livelihoods of millions in the UK.
Xia later added that, "At a certain point, when necessary, it is better to have a quick, prompt appreciation in a bid to fend off speculative capital".
Remaining controls could be lifted at the government's discretion, with suitable curbs on "speculative" capital flows staying in place indefinitely.This makes sense as far as it goes.
