The hot money that flows into our country is usually converted from foreign exchange into RMB. When the central bank absorbs foreign exchange, it must exchange it for the equivalent value of RMB. If too much is invested, it will cause inflation. Hedging hot money is usually through central bank bills and reserves, but Central bank bills are not mandatory. If the interest rate on central bank bills is too low, banks and other institutions will not buy them, which will result in a loss of bids. However, reserves are mandatory.