Taipei, Chinese yuan deposits held by banks in Taiwan rose in December, marking the third consecutive month of growth, as holdings by institutional accounts increased, the central bank said.
Data compiled by the central bank showed yuan deposits, including negotiable certificates of deposits (NCDs), held by Taiwanese banks stood at 244.49 billion yuan (US$37.67 billion) as of the end of December, up 8.63 billion yuan or 3.66 percent from a month earlier.
The month-on-month growth was the highest since April 2014, when yuan deposits grew 19.15 billion or 7.13 percent from a month earlier, the central bank’s data indicated.
Speaking with reporters, Chen Wan-ning (陳婉寧), deputy director of the central bank’s Foreign Exchange Department, described the latest month-on-month growth in yuan deposits as “explosive” compared with small increases and falls in recent months.
Chen said the continued weakness of the U.S. dollar prompted institutional investors to adjust their investment portfolios by raising yuan positions.
According to Chen, as they appear more willing to hold their funds in the yuan, institutional investors remitted yuan-denominated cash dividends received from their investments in China back to Taiwan in the month.
In addition, Chen said, institutional investors took back funds denominated in the yuan as their bond investments matured, while some remitted yuan borrowed through their offshore banking unit (OBU) accounts back to Taiwan.
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 domestic banking units (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.
As of the end of December, yuan deposits at DBUs rose 4.04 billion yuan from a month earlier to 208.94 billion yuan, while yuan deposits at OBUs also rose 4.59 billion to 35.55 billion, according to the central bank.
Meanwhile, yuan-denominated remittances in December totaled 191.51 billion yuan, up from about 153.46 billion in November, the data showed.
Remittances through DBUs totaled 93.95 billion yuan in December, up from 84.83 billion yuan in November, while those via OBUs also rose from 68.63 billion yuan in November to 97.55 billion, according to the central bank.
Source: Focus Taiwan News Channel