Declining deposit rates weaken US dollar's appeal to Chinese investors

The decline in U.S. dollar deposit rates has reduced their appeal to Chinese investors, prompting many to diversify their investments for better risk management.

According to statistics, the one-year U.S. dollar fixed deposit rates at many banks currently hover around 3 percent, marking a notable decline from the approximately 4 percent seen at the beginning of last year.

"Recently, fewer customers have been coming to our branch to ask about U.S. dollar fixed deposits. Our personal foreign currency deposit rates vary depending on the term and deposit amount, and are adjusted in line with market fluctuations and interbank pricing. Following the recent rate adjustments, many customers are seeking to diversify their investments to better manage risk," said Meng Xiangshuang, deputy manager of the retail department at the Hujialou branch of the Bank of Nanjing.

Some investors indicated that they will adjust their dollar holdings based on actual needs.

"I used to hold U.S. dollar fixed deposits when yields were relatively high, but rates have fallen. Combined with exchange rate volatility, the returns now feel uncertain. Going forward, I plan to diversify the investments based on my actual needs," said Liu, a Beijing resident.

Industry analysts point out that investing in U.S. dollar fixed deposits currently involves dual uncertainties -- interest rate and exchange rate. Investors are advised to manage their funds according to liquidity needs and risk tolerance, adopting tailored strategies accordingly.

"Beyond interest rates, exchange rates are also constantly changing. If the RMB appreciates during the deposit period, the foreign exchange losses at maturity could offset the interest earnings of deposits. Additionally, both buying and converting foreign currency involve costs. So, investors are recommended to align their decisions with actual U.S. dollar needs," said Li Ankang, customer manager at the Beijing Guanghua Branch of the China Construction Bank.

Declining deposit rates weaken US dollar's appeal to Chinese investors

Global food commodity prices climbed for a second consecutive month in March, driven mainly by higher energy costs linked to escalating conflict in the Middle East, the Food and Agriculture Organization of the United Nations (FAO) said in report released on Friday.

The FAO Food Price Index, which tracks monthly changes in the international prices of a basket of globally traded food commodities, averaged 128.5 points in March, up 2.4 percent from February and 1.0 percent above its level a year ago.

According to the report, the FAO Vegetable Oil Index and Sugar Price Index showed the largest increases, up 5.1 percent and 7.2 percent, respectively.

The FAO Cereal Price Index increased by 1.5 percent from the previous month, driven primarily by higher world wheat prices, which rose 4.3 percent.

The FAO Meat Price Index rose by 1.0 percent from the previous month, and the FAO All-Rice Price Index declined by 3.0 percent in March, according to the report.

FAO stated that rising energy and fertilizer prices have been driving up agricultural input costs.

If the conflict stretches beyond 40 days, farmers will have to choose to farm the same with fewer inputs, plant less, or switch to less intensive fertilizer crops, according to FAO Chief Economist Maximo Torero.

These choices will hit future yields and shape food supply and commodity prices for the rest of this year and beyond, Torero said.

Global food prices rise for 2nd consecutive month in March amid Middle East conflict: FAO