In India, the term ‘hot money’ is used to refer to Foreign Portfolio Investment. In economics, hot money often refers to the flow of capital (money) from one economy to another (or from one country to another), the aim being to earn a short-term profit on interest rate differences or expected exchange rate shifts. The term is used in such cases because the money can move extremely rapidly in and out of markets, potentially triggering instability. Foreign Portfolio Investment refers to the entry of funds into a country where foreigners deposit money in a country's bank or make purchases in the country's stock and bond markets for short time, thus making the market volatile.