Taipei, Jan. 20 (CNA) Chinese yuan deposits held by banks operating in Taiwan hit a 27-month high at the end of December on the back of a recovery in the Chinese currency value against the U.S. dollar, according to Taiwan's central bank.

Data compiled by the central bank shows that the balance of yuan deposits received by Taiwanese banks, including negotiable certificates of deposit (NCDs), at the end of December totaled 322.25 billion yuan (US$50.35 billion), up 4.38 billion yuan, or 1.38 percent, from a month earlier.

It was the eighth consecutive month of growth for Taiwan's yuan deposits and the December level was the highest since September 2015, when the balance of yuan deposits stood at 322.33 billion yuan.

For the whole of 2017, yuan deposits held by banks in Taiwan grew 10.84 billion yuan from a year earlier, as the strength of the Chinese currency against the greenback encouraged investors to raise their yuan holdings in banks' time deposit accounts, the central bank said.

In February 2013, when cross-Taiwan Strait financial exchanges were on the rise under the pro-China Kuomintang government, 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.

In June, 2015, the balance of yuan deposits taken by banks in Taiwan hit an all-time high of 338.22 billion yuan.

Ho Pei-chen (賀培真), a specialist with the central bank, said the growth in December largely resulted in an increase in yuan deposits at Taiwanese banks' OBUs with institutional clients, who were attracted by a stronger unit.

In addition to Taiwan, Ho said, yuan deposits held in banks of Hong Kong, Singapore and South Korea have also been on the rise due to the unit's appreciation against the U.S. dollar. Yuan deposits taken by banks' DBUs as of the end of December rose 4.62 billion yuan from a month earlier to 291.36 billion yuan, but the balance held by banks' OBUs fell 237 million yuan from a month earlier to 30.89 billion yuan, the central bank said.

Meanwhile, yuan-denominated remittances in December totaled 113.89 billion yuan, up from 107.43 billion yuan in November, with remittances through banks' DBUs at 57.68 billion yuan and OBUs at 56.20 billion yuan, according to the central bank.

Many banks in Taiwan offered higher interest rates to attract yuan deposits in December, with Jih Sun International Bank offering 2.9 percent for one-month yuan deposits and KGI Bank offering 3.58 percent for three-month deposits, the highest level for the two types of time deposits among local banks, the central bank said.

In addition, Sunny Bank offered 3.45 percent for six-month yuan deposits, the highest level, while Jih Sun Bank offered 3.6 percent for nine-month deposits and KGI Bank offered 3.85 percent for one-year deposits, also the highest local levels, the central bank added.

(By Chiu Po-sheng and Frances Huang)
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