Renminbi savings in Hong Kong dropped 1.52 percent in August from a year earlier as China suddenly depreciated its currency that month, the Hong Kong Economic Journal reported Friday.
Aggregate renminbi deposits, including certificates of deposit, fell 1.61 percent over the month.
Analysts expect more depositors to switch their time deposits back to Hong Kong dollars and the renminbi pool in the city to shrink 5 percent for the full year.
The decline in the amount of renminbi in Hong Kong continued during September, a spokesman for the Hong Kong Monetary Authority said.
Pacific Investment Management Co. LLC (PIMCO) has forecast that the renminbi will depreciate by a further 7 percent, given that growth in China’s gross domestic product is likely to fall to 5.5-6.5 percent over the next four quarters.
The People’s Bank of China may cut benchmark interest rates by a further 75 basis points (0.75 percentage point) and lower banks’ required reserve ratio by 200 basis points, PIMCO said.
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