Taiwan’s Chinese yuan deposits top 300 billion
Taipei, Oct. 16 (CNA) Chinese yuan-dominated deposits held by banks operating in Taiwan as of the end of September topped 300 billion yuan (US$49.02 billion) for the first time, as the Chinese currency’s appreciation encouraged investors to raise their yuan holdings, according to the central bank.
Statistics compiled by the central bank shows that the balance of yuan deposits in Taiwanese banks totaled 300.43 billion yuan as of the end of the month, up 1.76 percent from a month earlier. The month-on-month growth was the largest in five months.
Yuan deposits received by Taiwanese banks’ domestic banking units (DBUs) as of the end of September reached 248.21 billion yuan, up from 243.36 billion yuan recorded at the end of August, the data indicates.
According to the data, yuan deposits taken by offshore banking units (OBUs) of Taiwanese banks reached 52.22 billion yuan as of the end of the month, up from 51.88 billion yuan recorded a month earlier.
The central bank lifted a ban to allow local banks’ DBUs to conduct yuan-denominated business, including yuan deposits, in February 2013. Before the ban was removed, only banks’ OBUs were allowed to conduct yuan-denominated transactions.
In addition to a higher yuan value against the U.S. dollar, investors had been encouraged by massive promotion campaigns launched by local banks to raise their yuan positions, while rising demand for the yuan from enterprises as working capital also contributed to the growth.
As of the end of September, yuan remittances through Taiwanese banks totaled 123.17 billion yuan, up 55.04 billion from a month earlier, as local insurance companies invested more in yuan-denominated securities, the central bank said.
As Taiwanese investors operating in China repatriated their funds from the mainland back to Taiwan to meet fund demands at the end of the third quarter, yuan-remittances increased accordingly, the central bank said.