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Effects of hot money in SA?

March 25, 2011


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Hot money is inflow of capital that does not result in long-term investment, it is creating instability and volatility in the country. South Africa’s high interest rates that attract foreign capital and any change to its fiscal policy may urge investors to take their money to another country. SA is not able to use means of fiscal policy because the country is highly dependent on short-term foreign capital flows.

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