Chinese yuan deposits up for 3rd straight month in August

Taipei, Chinese yuan deposits held by Taiwan's banks were up at the end of August, marking the third consecutive month of a month-on-month increase at a time when the Chinese currency's depreciation against the U.S. dollar has moderated, according to the central bank.

Data compiled by the bank showed the balance of yuan deposits received by Taiwanese banks, including negotiable certificates of deposit (NCDs), totaled 314.93 billion yuan (US$45.64 billion) at the end of August, up 2.02 billion yuan from the end of July.

The increase in yuan deposits in Taiwan was less than 1 percent from a month earlier at the end of August, indicating the balance has hit its plateau and is unlikely to see a significant hike soon.

Ho Pei-chen (???), a specialist with the central bank, said the yuan fell only 0.14 percent against the greenback for the whole of August, indicating the Chinese currency has been relatively stabilized that month. In July, the yuan depreciated by 1.75 percent against the greenback.

In February 2013, when cross-Taiwan Strait financial exchanges were on the rise under the pro-China Kuomintang government, the central bank lifted a ban on local banks' domestic banking units (DBUs) conducting yuan-denominated transactions, including yuan deposits.

Before the ban was lifted, only the offshore banking units (OBUs) of Taiwanese banks were allowed to take yuan deposits and conduct other yuan transactions.

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

Yuan deposits taken by banks' DBUs as of the end of August rose 107 million yuan from a month earlier to about 281.35 billion yuan, while the balance held by banks' OBUs also grew 1.91 billion yuan from a month earlier to 33.58 billion yuan, the central bank said.

Meanwhile, yuan-denominated remittances in August totaled 138.45 billion yuan, down about 30.22 billion yuan from a month earlier, with remittances through banks' DBUs at 80.65 billion yuan, down from 86.77 billion yuan a month earlier, and OBUs at 57.80 billion yuan, down from 81.90 billion, according to the central bank.

Ho said the sharp decline in yuan remittance came after Taiwanese tech firms which operated in China moved fewer funds to the main board as their fund demand here increased.

She said some of the local tech enterprises even kept their yuan-denominated funds at their deposit accounts at Taiwanese banks' OBUs in August to boost the entire yuan deposits by the end of the month.

Many banks in Taiwan offered higher interest rates to attract yuan deposits in August, with Standard Chartered Bank offering 3.8 percent for one-year yuan deposits and KGI Bank offering 3.6 percent for nine-month deposits, the highest level for the two types of time deposits among local banks, the central bank said.

In addition, Jih Sun International Bank offered 3.6 percent for six-month yuan deposits, the highest level, while KGI Bank offered 3.5 percent for three-month deposits and Jih Sun Bank offered 2.9 percent for one-month deposits, also the highest local levels, the central bank added.

Source: Focus Taiwan News Channel