Chart: China’s foreign currencies deposits continue to increase16 August, 2012, 12:09. Posted by Zarathustra
Recently, we have started looking at the massive surge in China’s foreign currencies deposits, as we now know two important fact: 1) Corporate China was short US dollar; and 2) Corporate China is now accumulating as much US dollar as possible. This is quite possibly because of the increasing expectation that Chinese Yuan will be depreciating, which has led to apparent capital outflow.
The latest numbers from the People’s Bank of China show that the trend of US dollar accumulation in the corporate sector is continuing, well, and alive.
FX deposit from household was almost unchanged on the month, while FX deposit from non-financial institutions was up to US$287 billion. FX deposits outstanding from non-financial institutions in July increased by 84.0% compared to the same month a year ago, while that from the household increased by 20.0%.
Source: People’s Bank of China