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Chinese yuan deposits in Taiwan up for 4th straight month

2018/10/20 14:29:51

Taipei, Oct. 20 (CNA) Chinese yuan deposits held by Taiwan's banks moved higher at the end of September, marking the fourth consecutive month of a month-on-month increase as investors here shrug off a weakening yuan against the U.S. dollar, according to the central bank.

Data compiled by the central bank showed the balance of yuan deposits received by Taiwanese banks, including negotiable certificates of deposit (NCDs), totaled 315.52 billion yuan (US$45.52 billion), up 582 million yuan from a month earlier.

But the September growth was slower than the growth seen in August, when deposits rose 2.02 billion yuan from a month earlier, data indicated.

In September, the yuan fell 0.62 percent against the U.S. dollar after a decline of 0.14 percent in August. The Chinese currency has come under pressure amid escalating trade tensions between the United States and China and the market has expected the U.S. dollar will rise further to top 7 yuan in the short term compared with the latest close of 6.93 yuan.

Ho Pei-chen (賀培真), a specialist with the central bank, said the yuan has become a critical part of many investors' portfolios so it was understandable that they were still willing to hold the currency.

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.

Yuan deposits taken by banks' DBUs as of the end of September fell 636 million yuan from a month earlier to about 280.72 billion yuan, while the balance held by banks' OBUs rose 1.22 billion yuan from a month earlier to 34.8 billion yuan, the central bank said.

Meanwhile, yuan-denominated remittances in September totaled 131.79 billion yuan, down from 138.45 billion a month earlier, with remittances through banks' DBUs at 63.14 billion yuan, down from 80.65 billion yuan a month earlier, and OBUs at 68.65 billion yuan, up from 57.80 billion yuan, according to the central bank.

Many banks in Taiwan offered higher interest rates to attract yuan deposits in September, with Standard Chartered Bank offering 3.8 percent for one-year yuan deposits and Jih Sun International Bank offering 3.6 percent for nine-month deposits, the highest level for the two types of time deposits among local banks, the central bank said.

In addition, Jih Sun Bank offered 3.6 percent, 3.25 percent and 2.9 percent for six-month, three month and one month yuan deposits, respectively, the highest levels for the three types of time deposits in the month, the central bank added.

(By Chiu Po-sheng and Frances Huang)
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