Analysis: China’s Banks Are Bursting With Dollars, and That’s a Worry

Analysis: China’s Banks Are Bursting With Dollars, and That’s a Worry
A one hundred U.S. dollar bank note is held in front of a yuan currency sign in Hong Kong, on Oct. 14, 2011. Laurent Fievet/AFP via Getty Images
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SHANGHAI/SINGAPORE—A mountain of dollars on deposit in China has grown so large that banks are struggling to loan the currency and traders say it poses a risk to official efforts to control a fast-rising yuan.

Boosted by surging export receipts and investment flows, the value of foreign cash deposits in China’s banks leapt above $1 trillion for the first time in April, official data shows.