Taiwan’s yuan deposits hit new high despite slower growth
Taipei, July 16 (CNA) Chinese yuan-denominated deposits held by banks operating in Taiwan as of the end of June hit a new high, but growth has shown signs of moderating, according to the central bank.
Statistics released by the central bank on Wednesday indicate that the balance of yuan deposits received by banks in Taiwan as of the end of June totaled 338.22 billion yuan (US$54.55 billion), up 0.57 percent from a month earlier.
The latest month-on-month growth rate was lower than 1.82 percent, 1.71 percent and 1.87 percent recorded in March, April and May, respectively, the data shows.
Market analysts said that the lower growth reflects moves by the People’s Bank of China (PBOC), China’s central bank, to cut interest rates four times since November 2014. They said that the lower interest rates in China prompted investors to move their funds out of their yuan deposit accounts.
Following the PBOC’s rate cuts, some Taiwan-registered banks even shelved their high-rate yuan deposit programs, which has dampened investors’ interest in the Chinese currency to some extent, analysts said.
In addition, the lower growth rate also showed lingering concerns over China’s economic growth, while recent turbulence in the China equity markets turned many investors away from their yuan deposit accounts, the analysts added.
As of the end of June, yuan deposits received by the domestic banking units (DBUs) of the banks in Taiwan rose to 283.39 billion yuan from 281.93 billion yuan recorded at the end of May, the central bank data shows.
The statistics indicate that yuan deposits taken by the offshore banking units (OBUs) of the banks operating in Taiwan totaled 54.83 billion yuan as of the end of June, up from 54.36 billion recorded at the end of May.
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.
The central bank said that yuan-denominated lending and interbank loans as of the end of June rose 3.17 percent from a month earlier to 28.03 billion yuan.
As of the end of June, yuan-denominated lending and interbank loans of the DBUs fell to 9.11 billion yuan from 9.46 billion yuan seen a month earlier, while the figure for the OBUs also rose to 18.93 billion yuan from 17.71 billion yuan.
Yuan-denominated remittances through Taiwanese banks as of the end of June rose 45.22 percent from a month earlier to 297.53 billion yuan, the data shows. Remittances through the banks’ DBUs rose to 170.15 billion yuan from 116.50 billion, and the figure recorded by the OBUs also rose to 127.38 billion yuan from 88.39 billion yuan.
