FX intervention

How unlimited foreign exchange intervention can become problematic even for an appreciating currency. For the moment Chinese rates are below USD, but this may be the way that China is heading also.

Bloomberg.com: Currencies:

"``Lawmakers see the snowballing deficit from the foreign- exchange fund heavily weighing on the government's finances,'' said Oh Jae Kwon, head of the Bank of Korea's currency-market operations team. ``They may ask the national audit board to look into the case.'' Accumulated losses from the management of the fund were 18 trillion won ($19 billion) at end-2005, he said. "