Wrong Character Encoding

[Marcus Manning]

I hope it is right so to write my bug report to this address in the 
given format.

If I put a "ä"-character in my terminal and press Enter, then I will 
receive an escape-sequence like this: $'\303\244'.  The same result by 
"ü", "ö", "ß", but other sequences.

My /etc/inputrc:
# do not bell on tab-completion
#set bell-style none

set meta-flag on
set input-meta on
set convert-meta off
set output-meta on

$if mode=emacs

# for linux console and RH/Debian xterm
"\e[1~": beginning-of-line
"\e[4~": end-of-line
"\e[5~": beginning-of-history
"\e[6~": end-of-history
"\e[7~": beginning-of-line
"\e[3~": delete-char
"\e[2~": quoted-insert
"\e[5C": forward-word
"\e[5D": backward-word
"\e\e[C": forward-word
"\e\e[D": backward-word
"\e[1;5C": forward-word
"\e[1;5D": backward-word

# for rxvt
"\e[8~": end-of-line

# for non RH/Debian xterm, can't hurt for RH/DEbian xterm
"\eOH": beginning-of-line
"\eOF": end-of-line

# for freebsd console
"\e[H": beginning-of-line
"\e[F": end-of-line
$endif

localectl:
System Locale: LANG=de_DE.UTF-8
                  LC_COLLATE=C
                  LC_MESSAGES=C
       VC Keymap: de-latin1
      X11 Layout: n/a

locale:
LANG=de_DE.UTF-8
LC_CTYPE="de_DE.UTF-8"
LC_NUMERIC="de_DE.UTF-8"
LC_TIME="de_DE.UTF-8"
LC_COLLATE=C
LC_MONETARY="de_DE.UTF-8"
LC_MESSAGES=C
LC_PAPER="de_DE.UTF-8"
LC_NAME="de_DE.UTF-8"
LC_ADDRESS="de_DE.UTF-8"
LC_TELEPHONE="de_DE.UTF-8"
LC_MEASUREMENT="de_DE.UTF-8"
LC_IDENTIFICATION="de_DE.UTF-8"
LC_ALL=

SHELL=bash
TERM=xterm
OS=arch linux



Maybe you could help me.
Thanks.