Friday, February 3, 2012

Investors shift from yuan to dollar

"The yuan market in Hong Kong, China's laboratory for liberalizing its currency, has taken off since Beijing relaxed rules for the use of yuan in the city in July 2010. Deposits in yuan grew briskly, fueled by expectations that the currency will appreciate rapidly.

In recent months, however, the growth in yuan deposits in Hong Kong has almost halted as investors shifted to the safe-haven U.S. dollar as markets gyrated in response to the euro-zone debt crisis and U.S. credit-rating downgrade in August.

By the end of December 2011, yuan funds parked in Hong Kong totaled 588.5 billion yuan ($93.2 billion), down 6.2% from 627.3 billion yuan, or renminbi, in November, according to figures the Hong Kong Monetary Authority released Tuesday."
--http://online.wsj.com/article/SB10001424052970203920204577194712177573668.html

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