Chinese yuan deposits up, amount held by retail investors falls

Taipei, Aug. 16 (CNA) Chinese yuan deposits held by banks in Taiwan at the end of July rose slightly from a month earlier but the amount owned by retail investors and placed in the banking system continued to fall, according to the central bank.

Yuan deposits in the local banking system as of the end of July rose by 620 million yuan (US$91.31 million) from a month earlier to 224.04 billion yuan, Central Bank of the Republic of China (Taiwan) figures showed.

The central bank said as the yuan deposits had become a mature financial instrument in Taiwan, the month-on-month change in the amount had stayed stable.

Despite the stable change in the yuan deposits, the central bank said yuan deposits in the domestic banking units (DBUs) of local banks fell by 911 million yuan from a month earlier to 193.65 billion yuan as of July as both institutional and retail investors cut their holdings.

According to the central bank, retail investor yuan deposits fell for the 17th consecutive month, while institutional investors converted their yuan into Taiwan dollars soon after they received payments denominated in yuan during the month.

As of the end of July, the deposit balance in the banking sector's offshore banking units (OBUs) bucked the downturn, rising by 1.53 billion yuan from a month earlier to 30.39 billion yuan as of the end of July, the central bank said.

The increase in yuan deposits at the OBUs came partly because some enterprises received cash dividends denominated in the Chinese currency, while some other companies moved their funds into the OBUs from the DBUs, the central bank said.

Meanwhile, yuan-denominated remittances in July totaled about 146.46 billion yuan, up from 142.84 billion yuan a month earlier, with remittances through DBUs totaling 86.78 billion yuan, down from 87.42 billion yuan a month earlier, but those via OBUs reaching 59.68 billion yuan, up from 55.43 billion yuan, according to the central bank.

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 domestic banking units (DBUs) of 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.

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

SinoPac Bank currently offers the highest one-month yuan time deposit rate of 3.05 percent in Taiwan, while CTBC bank offers the highest three-month time deposit rate of 3.28 percent, the central bank said.

In addition, SinoPac Bank offers the highest six-month yuan time deposit rate of 2.38 percent, while the Land Bank of Taiwan and Sunny Bank offers the highest nine-month and one-year deposit rates, respectively, of 1.45 percent and 2.4 percent, the central bank added.