Taipei, April 20 (CNA) Chinese yuan deposits received by the domestic banking units (DBUs) of Taiwan-based banks fell for the seventh consecutive month in March due to a redemption of two yuan-denominated bond mutual funds, according to the central bank.
Data compiled by the central bank showed the balance of yuan deposits taken by the DBUs fell 438 million yuan (US$65.33 million) from a month earlier to 248.29 billion yuan.
Chen Wan-ning (陳婉寧), a specialist in the central bank's Foreign Exchange Department, said the decline in yuan deposits at the DBUs showed interest by many investors here in the yuan was on the decline, while the market seemed to be downbeat about the yuan's prospects.
Chen said when the yuan looked less attractive to investors, many of them preferred to move their funds to non-yuan denominated financial products by terminating their yuan deposit contracts.
Still, yuan deposits held by both DBUs and offshore banking units (OBUs) at the end of March stopped a five-month decline as the balance rose to 282.28 billion from 281.40 billion at the end of February, the central bank said.
The increase in the total came after the balance of yuan deposits taken by the OBUs rose to 33.99 billion at the end of March, up from 32.67 billion at the end of February, the central bank added.
Chen said the increase in yuan deposits at the OBUs resulted from fund management by Taiwanese firms operating in China, while the local electronics sector received more yuan-denominated payments in the month.
In February 2013, when cross-strait financial exchanges were on the rise under the then-Kuomintang government, the central bank lifted its ban on the DBUs of local banks conducting yuan-denominated transactions, including yuan deposits.
Before the ban was lifted, only the (OBUs) of Taiwanese banks were allowed to accept yuan deposits or conduct other yuan transactions.
The major clients of the DBUs are local individuals and corporations, while the OBUs largely deal with cross board foreign exchange transactions.
In June 2015, the balance of yuan deposits at banks in Taiwan hit an all-time high of 338.22 billion yuan.
In terms of yuan-denominated remittances in March, they totaled 119.23 billion yuan, up from 151.77 billion a month earlier, with remittances through DBUs totaling 70.76 billion yuan, down from 76.99 billion yuan a month earlier, and those via OBUs reaching 48.47 billion, down from 74.77 billion yuan, according to the central bank.
It said Jih Sun International Bank offered 3.1 percent in interest rate on one-year yuan deposits, 3.0 percent on nine-month deposits, 2.9 percent on six-month deposits and 2.9 percent on three-month deposits in March, the highest rates among local banks.
For one-month yuan deposits in March, Shanghai Commercial & Savings Bank offered 2.8 percent interest, the highest during the month, the central bank said.