Dollar deposits are popular, is it worth temporarily exchanging "getting on the bus"?

Economic Observer, reporter, Wang Qing "I heard that the interest rate of the US dollar time deposit is particularly high recently, and it can reach four or five points for one year. Compared with the three-year interest rate of the RMB time deposit, the highest interest rate is only 3.5%. The regular deposit of US dollars must be more fragrant." On June 28, Ms. Qin, who came to the bank branch to inquire about the US dollar time deposit, told the Economic Observer reporter.

Ms. Qin happened to have some spare US dollars on hand, so she took advantage of her lunch break to come to the bank to consult and understand the situation. Recently, there are many depositors who have come to the bank to consult and understand the US dollar time deposit like Ms. Qin.

Since June, the RMB time deposit interest rate of Chinese banks has started a new round of "interest rate cuts". Not only the deposit interest rate cuts, but also the Open Market Operating Rate (OMO), the Medium-Term Lending Facility (MLF) interest rate cuts, and the loan market quotation rate (LPR) have been reduced one after another. Against this background, although the US dollar time deposit rate has also been reduced, the one-year interest rate is 3.3% to 5.45%, and the interest rate gap with RMB deposits is still widening, so it is very popular in the market. This is also reflected in the exchange rate trend. During the intraday session on June 30, the offshore RMB was trading at 7.2661 against the US dollar, and the US dollar index was trading at 103.38.

Why is the interest rate of US dollar time deposit higher than that of RMB time deposit? For ordinary depositors, is it still suitable to "get on the bus" at present, and what risks need to be paid attention to?

One-year interest rates are over 5%.

"Recently, the RMB time deposit interest rate has dropped again. Fortunately, I bought a 3.5% three-year fixed deposit at the suggestion of the bank wealth manager during the May Day holiday. But I heard that the reduction of the fixed deposit interest rate is a general trend, and the probability will be lower and lower in the future. But even so, there are still many people who deposit, especially large certificates of deposit, and the quota is basically not released in seconds." Ms. Qin said helplessly that for families to invest and manage wealth, the most difficult thing at present is to find higher returns on the basis of capital preservation.

On June 8, the six major banks lowered the listing interest rate of personal RMB deposits, of which the demand deposit interest rate generally fell by 5 basis points, and the 2-year, 3-year and 5-year time deposit interest rates generally fell by 10 basis points to 15 basis points. Subsequently, comprehensive joint-stock banks followed suit.

In this context, US dollar deposits with a one-year interest rate of up to 5% are very popular. "The US dollars at home are mainly used to prepare for the children to study abroad in advance, but the plan has changed recently, so the money has been idle. It just so happens that a colleague in the office has deposited US dollars for fixed deposit. It is said that the one-year US dollar deposit rate has risen from more than one point at the beginning of last year to more than five points in the first half of this year. Compared with the three-year RMB time deposit, the US dollar time deposit rate is simply too fragrant. I regret starting late," Ms Qin said.

After visiting a number of bank outlets, the Economic Observer reporter learned that, except for the low interest rates of some banks' US dollar time deposits, the interest rates of most US dollar time deposits are much higher than the RMB time deposit rates. Some foreign banks and small and medium-sized banks have a one-year interest rate of up to 5%. "Last year, our US dollar time deposit interest rate was quite good, and it has been adjusted since this year. At present, the maximum one-year period can only be 1.70%, and the minimum deposit 50,000 US dollars or more is required. Compared with other banks, the interest rate is really unattractive, so recently many customers have transferred their US dollars to find higher interest rate deposit products outside after maturity." Xiao Zhou, a wealth manager at a joint-stock bank in Shanghai, told reporters that especially after a wave of interest rate cuts on RMB time deposits ended at the beginning of the month, depositors hope to find a way to achieve higher interest rates on the basis of capital preservation.

Xiao Zhou told reporters that after the RMB time deposit interest rate cut, many banks have lowered the US dollar time deposit interest rate. Some banks that have not adjusted have imposed restrictions on the duration and amount of funds for US dollar time deposits. For example, a city commercial bank recently had a one-year US dollar time deposit interest rate of 5.5%, and the capital threshold was between $7,000 and $50,000. Recently, it was slightly reduced to a one-year period of 5.45%, which is still much higher than the one-year RMB time deposit interest rate. However, the longer the deposit period or the greater the amount of funds, the lower the interest rate.

In addition to promoting dollar time deposits, many banks will also focus on recommending dollar-linked structured deposit products.

The wealth manager of a joint-stock bank said during the promotion that the bank's current one-year interest rate on time deposits in US dollars is 3.8%, but for customers who come to consult, it is more recommended to configure US dollar structured products. The lowest value in the reference annualized income range of such products can basically be guaranteed. For example, for a product with a holding period of 367 days, the minimum purchase threshold is $2,000, and the reference annualized income is 4.9% to 5.4%. Basically, the interest rate can reach 4.9% under the most unfavorable circumstances. However, the part above the minimum income is not guaranteed.

Temporary exchange "get on the bus" pay attention to the risk

Ms. Qin told reporters that when consulting and handling business, the financial manager also reminded that the US dollar time deposit interest rate will be adjusted on a daily or weekly basis. The specific deposit interest rate should be subject to the actual quotation on the day of deposit, and it needs to be handled at the offline outlet counter.

Although the interest rate of US dollar deposits is more "fragrant" than that of RMB fixed deposits in the same period, it is also necessary to be vigilant about the risks. For ordinary investors, whether to choose US dollar deposit products also needs to pay attention to the potential exchange rate fluctuation risk of US dollars. "We will recommend this kind of deposit product to customers who already have idle US dollar funds in their hands. However, there are indeed many customers who have consulted foreign exchange exchange and deposit US dollars for fixed deposit recently. We will also remind these customers to be vigilant about the risk of exchange rate fluctuations and the cost of exchange exchange." The wealth manager of the joint-stock bank said.

The wealth manager said that if depositors are at a high level in the US dollar when they exchange foreign exchange, even if the deposit interest rate is relatively high, they may still lose money once the US dollar depreciates, so they need to consider carefully. For example, if 1 US dollar can be exchanged for 7.25 yuan now, if the US dollar depreciates in the future, 1 US dollar can only be exchanged for 6.25 yuan, then the customer will have a 14% exchange rate discount when changing foreign exchange.

Zhou Maohua, an analyst at the financial marekt department of Everbright Bank, said in an interview with reporters that for investors who have excess US dollars in their hands, and do not need to consider the liquidity problem of US dollars for a long period of time, they can consider part of the proportion of US dollar deposits; but for ordinary investors to buy US dollar deposit products, they need to use RMB to buy US dollars for deposits, and then exchange the US dollars back into RMB after the deposit expires. In the scenario that the US dollar interest rate remains high and the US dollar is in an appreciation cycle, it is beneficial for ordinary investors, but the US dollar itself faces a more complicated environment, and ordinary investors will inevitably face the risk of fluctuations in the US dollar exchange rate when purchasing US

For the reason that the US dollar time deposit interest rate is much higher than the RMB time deposit interest rate in the same period, Zhou Maohua said that it is mainly due to the sharp turn of the Federal Reserve's policy, aggressive interest rate hikes and balance sheets, and the rapid contraction of US dollar liquidity worldwide has promoted the US dollar deposit interest rate to rise sharply.

It is worth mentioning that the central bank has previously stated that it will resolutely curb the sharp fluctuations in the exchange rate and study the self-regulation of US dollar deposits; and pointed out that the expectations of Financial Institution Groups, enterprises and residents for the exchange rate are generally stableforeign exchange marketA solid foundation and strong guarantee for smooth operation. Regulators will jointly guide expectations, correct pro-cyclical and one-sided behavior when necessary, and curb speculative behavior.

Regarding the market outlook, Zhou Maohua believes that the US dollar interest rate is related to the direction of the Federal Reserve's policy. From the perspective of the US internal and external environment, the Federal Reserve's policy priority is still to control inflation and push interest rates into restrictive levels; at the same time, since the US banking crisis in March, the structural contraction of the credit environment may increase the risk of economic recession, and the Federal Reserve still hopes that the economy will achieve a soft landing. The Federal Reserve raised interest rates by another 25 basis points in May, and then maintained a high interest rate of 5.25% until the end of the year, and continued to shrink the balance sheet

"The Fed's interest rate hike is coming to an end, and the rise in US dollar interest rates has weakened. However, due to the Fed's'high interest rate + shrinking balance sheet 'approach, the Fed is still collecting water, and US dollar liquidity may still be tight, so the possibility of a sharp decline in deposit rates is low," Zhou Maohua said.