| China's household savings decline in Oct. |
BEIJING, Nov. 14 -- China's household savings posted their first monthly decline in more than five years in October as residents looked for better investment returns on the nation's recovering stock markets, the central bank said yesterday.
Yuan-denominated personal deposits fell 7.6 billion yuan (965 million U.S. dollars) from a month before to 15.8 trillion yuan (2.0 trillion dollars), the first contraction since June 2001, the People's Bank of China (PBOC) said on its website.
The drop-off pared the growth in China's household savings to 15.5 percent in the first 10 months of the year, down 0.5 percentage points from the figure for the first three quarters, the statement said.
"Some of the savings have been channeled into the equity markets," the central bank said in the statement.
Client deposits at domestic stockbrokers totaled 604.2 billion yuan (76.8 billion dollars) at the end of last month, up 216.1 billion yuan (27.5 billion dollars), or 183 percent, from the end of September, it said.
China, eager to puts its massive bank deposits to better use, is striving to shore up its capital and bond markets and encourage citizens to invest overseas through mutual funds.
The benchmark Shanghai Composite Index added 4.90 percent last month, extending its year-to-date rise to 62.2 percent after a four-year slump.
Investors were chasing blue chips such as banks and property developers based on optimism these stocks will be lifted by China's sustained economic growth and a stronger yuan.
Among other financial developments, China M2, a broad measure of money supply that reflects all cash and deposits, jumped 17.1 percent to 33.27 trillion yuan (4.23 trillion dollars) on Oct. 31, compared with a 16.8 percent increase a month earlier, the central bank statement said.
The rise marks the first acceleration in growth since April and may prompt regulators to take additional measures to curb rapidly growing investment and trade, analysts said.
China's central bank has raised its benchmark lending rates twice this year and lifted the amount of deposits commercial banks must hold as reserves on three occasions.
"We are not too concerned about October M2 growth, but in November and December the PBOC will face a huge amount of liquidity hitting the banking system," said Stephen Green, a senior economist at Standard Chartered Bank.
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