The Chinese More Reluctant To Hold Dollars

Chinese households have become more reluctant to hold US dollar deposits, the central bank found in a survey published earlier this week, less than two months after the yuan was revalued.

Fewer people deposited dollars in the three months to the end of August and more people withdrew them, the survey found.

Among 20,000 households surveyed in 50 cities in mid to late August, 6.9 percent had withdrawn or deposited foreign currency in the previous three months, down from 7.6 percent in the previous quarter, the survey found.

Among these account holders, 37 percent withdrew U.S. dollar deposits after the yuan revaluation, up 2.2 percent points from the previous quarter and 4.4 percent points from the same period of last year,?? the central bank said.

By contrast, households making U.S. dollar deposits fell 3.4 percentage points from the previous quarter to 33.5 percent, it said.

Chinese foreign currency deposits were US$161.1 billion at the end of August, US$600 million more than that of the end of July.

China revalued the yuan by 2.1 percent to 8.11 per U.S. dollar July 21, scrapping a decade-long peg against dollar and putting the yuan under a managed float with reference to a basket of foreign currencies, including the U.S. dollar, euro and yen.

The survey also found consumers in Beijing were more inclined to purchase property while buyers in Shanghai wanted to wait for lower prices