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Definition

Hot money; highly mobile capital that moves rapidly between financial markets to chase short-term profits.

neutralmoney

How it's used

Primarily used in financial journalism and economic discussions, this term describes capital that moves rapidly between markets to exploit interest rate differences or currency fluctuations. It carries a negative connotation of instability, as the sudden withdrawal of such funds can cause significant market volatility.

Examples

This hot money is flowing in very rapidly.

Common phrases

inflow of hot money
withdrawal of hot money

Common mistake

Do not confuse this with general investment capital, as it specifically refers to speculative, short-term funds that lack long-term commitment to the local economy.

Grammar color guide

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