Chinese yuan deposits held by banks in Taiwan at the end of September fell to their lowest in 10 months, largely because institutional investors cut their holdings in the Chinese currency, according to the central bank.
Data compiled by the central bank showed yuan deposits at Taiwanese banks totaled 237.51 billion yuan (US$37.11 billion) as of the end of September, down 332 million yuan or 0.14 percent from a month earlier, the second consecutive monthly decline.
The data indicated that September yuan deposits dipped to their lowest since November 2020, when the figure stood at 235.86 billion yuan.
Hung Ying-fen (???), a specialist with the central bank's Foreign Exchange Department, said the domestic banking units (DBUs) of Taiwanese banks saw their yuan deposits fall at the end of September as institutional investors moved funds to pay for their purchases, while deposits in retail investors' DBU accounts fell slightly.
At the end of September, the yuan deposits at the DBUs of Taiwanese banks fell 621 million yuan from a month earlier to 207.33 billion yuan, while yuan deposits at their offshore banking units (OBUs) rose 289 million yuan from a month earlier to about 30.18 billion yuan, central bank data showed.
According to the central bank, SinoPac Bank currently offers the highest interest rate of 3.05 percent among banks in Taiwan for one-month yuan deposits, while Chang Hwa Commercial Bank offers the highest rate of 2 percent for three-month yuan deposits.
In addition, Land Bank of Taiwan's six-month interest rate is the highest at 2.3 percent with Jih Sun International Bank's nine-month interest rate the highest rate with 1.8 percent, and Land Bank of Taiwan's one-year interest rate the highest at 2.4 percent, the central bank said.
Hung said only the six month interest rates for yuan deposits in the local banking sector fell from the end of September, while interest rates for other durations remained little changed.
Yuan deposits hit an all-time high of 338.22 billion in June 2015, but fell below 300 billion at the end of 2018 and have been mostly in decline since then.
The DBUs of local banks have been allowed to conduct yuan-denominated transactions since February 2013. Prior to that, only OBUs were allowed to carry out yuan transactions.
Meanwhile, yuan-denominated remittances in September totaled 197.96 billion yuan, up from about 159.40 billion in August, the data showed.
Remittances through DBUs totaled 128.24 billion yuan in September, up from 110.59 billion yuan in August, while those via OBUs also rose from 48.82 billion yuan to 69.71 billion, according to the central bank.
Source: Focus Taiwan News Channel