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Chinese Yuan deposits up for fifth straight month

2017/10/21 18:33:52

Taipei, Oct. 21 (CNA) Chinese yuan deposits held by banks operating in Taiwan rose for the fifth consecutive month in September on hopes that the Chinese currency will stabilize after authorities in China come up with measures to boost the unit, according to the local central bank.

Despite a fall in the yuan's value against the U.S. dollar last month, local investors were not deterred and remained upbeat about the Chinese currency's future movement, expecting Beijing to introduce supportive measures during the on-going 19th congress of the Communist Party of China, market analysts said.

Although the yuan fell about 0.93 percent against the U.S. dollar in September, yuan deposits received by Taiwanese banks, including negotiable certificates of deposit (NCDs), at the end of the month totaled 312.82 billion yuan (US$47.25 billion), up 2.74 billion yuan or 0.88 percent from the end of August.

The September yuan deposit balance was the highest in 18 months, central bank data showed.

After a fall in September, the yuan regained its footing and has gained 0.48 percent against the greenback so far in October.

In February 2013, the central bank lifted a ban on local banks' domestic banking units (DBUs) conducting yuan-denominated transactions, including yuan deposits.

Before the ban was lifted, only the offshore banking units (OBUs) of Taiwanese banks were allowed to take yuan deposits and conduct other yuan transactions.

Central bank's statistics show that yuan deposits taken by banks' DBUs totaled 280.6 billion as of the end of September, up 2.97 billion yuan from a month earlier, while yuan deposits received by OBUs fell 55 million yuan to 32.22 billion yuan.

The central bank said the increase in yuan deposits at bank DBUs came after one bank issued a tranche of NCDs with a maturity of three months. It was the first issuance of yuan-denominated NCDs in Taiwan in 14 months.

Ho Pei-chen (賀培真), a specialist with Taiwan's central bank, said the volatility of the yuan has deterred many local investors from holding the currency since 2015 and pushed down yuan deposits in Taiwan, but the yuan deposit balance has turned stable over the past few months.

The yuan deposit balance returned to 310 billion yuan in August, the first time since January, and continued to grow in September.

Meanwhile, yuan-denominated remittances in September totaled 93.18 billion yuan, up from 92.07 billion yuan in August, with remittances through banks' DBUs at 56.23 billion yuan and OBUs at 36.95 billion yuan, according to the central bank.

(By Chiu Po-sheng and Frances Huang)