International monetary battle heating up?

[marmar]

By Chris Oliver, MarketWatch


HONG KONG (MarketWatch) — China announced new measures Tuesday to curb inflows of foreign speculative capital, as senior government officials stepped up criticism of excessively loose monetary policies abroad, such as those of the Federal Reserve.

The State Administration of Foreign Exchange (SAFE) said in a statement it will strictly control its financial institutions’ quotas for the use of short-term foreign debt.

The nation’s foreign-exchange regulator also said it will tighten its oversight of funds shipped home by Chinese companies operating abroad, as well direct investments into China by foreign investors.

The news measures echoed a statement Friday by People’s Bank of China Gov. Zhou Xiaochuan, who said China could use capital controls to curb speculative inflows.

Zhou cautioned that China faced a difficult challenge in keeping out speculators because of its relatively high interest rates and expectation of gains in the value of the yuan. .........(more)

The complete piece is at: http://www.marketwatch.com/story/china-cracks-down-on-inflows-slams-qe-2010-11-09?dist=countdown

[DJ13]

1. Live by the 'free markets', die by the 'free markets'