Taipei, Dec. 18 (CNA) Chinese yuan deposits at banks operating in Taiwan fell to a four-year low in November because of the weakness of the Chinese currency against the U.S. dollar, according to Taiwan's central bank.
Central bank data showed the balance of yuan deposits at banks in Taiwan, including negotiable certificates of deposit (NCDs), totaling 301.79 billion (US$43.80 billion) at the end of November, down 6.69 billion yuan or 2.17 percent from a month earlier.
It was the lowest balance since November 2014, when yuan deposits at banks in Taiwan totaled 300.6 billion yuan, the central bank said.
Analysts said the falling yuan deposits reflected the lack of investor faith in the Chinese yuan, which fell 0.43 percent against the greenback in November amid continued tensions between the United States and China after a 1.24 percent drop in October.
Because the market is anticipating the yuan's weakness against the U.S. dollar to continue as China's economy slows down, yuan deposits held by Taiwanese banks could fall below 300 billion yuan in the short term, analysts said.
The domestic banking units (DBUs) of Taiwanese banks began taking yuan deposits in February 2013 when the central bank lifted a ban on local banks conducting yuan-denominated transactions.
Before the ban was lifted, only the offshore banking units (OBUs) of Taiwanese banks were allowed to accept yuan deposits or conduct other yuan transactions.
The balance of yuan deposits at banks in Taiwan hit an all-time high of 338.22 billion yuan in June 2015.
As of the end of November, yuan deposits at DBUs were down 5.28 billion yuan from a month earlier to about 267.52 billion yuan, while the balance at OBUs also dropped 1.41 billion yuan to 34.27 billion yuan, according to central bank figures.
The central bank said the drop in yuan deposits at DBUs reflected the need for companies to pay for their purchases, while the fall at OBUs came after Taiwanese firms remitted funds to boost their stakes in companies located in China.
Meanwhile, yuan-denominated remittances in November totaled 87.22 billion yuan, down from 138.11 billion yuan, with remittances through DBUs totaling 47.31 billion yuan and through OBUs totaling 39.91 billion, according to the central bank.
Many banks in Taiwan promoted higher interest rates in November to attract yuan deposits. Standard Chartered Bank offered 3.8 percent on one-year yuan deposits, and Jih Sun International Bank offered 3.6 percent on nine-month and six-month deposits, the highest rates among local banks, the central bank said.
Bank of Kaohsiung offered interest of 3.5 percent on three-month yuan deposits and Jih Sun Bank paid interest of 3.1 percent on one-month yuan time deposits, the highest for those products during the month, the central bank said.
(By Chiu Po-sheng and Frances Huang)Enditem/ls