The central bank yesterday said that 2.8 billion Chinese yuan (US$451 million) was deposited by Taiwanese in the first two days after local banks were cleared to offer yuan-based business on Wednesday.
A total of 1.5 billion yuan was deposited yesterday, following deposits of 1.3 billion yuan on Wednesday, the bank said in a statement.
A total of 46 banks, including 29 domestically registered ones, have launched yuan-denominated services, such as deposits, loans and remittances, after Taipei and Beijing set up a cross-Taiwan Strait currency-clearing mechanism.
Chinatrust Commercial Bank (中國信託商銀) said yesterday that investors should see the launch of yuan business as an opportunity to build up their yuan holdings to account for about 10 percent of their foreign-currency portfolios.
The bank, a subsidiary of Chinatrust Financial Holding Co (中信金控), said that as the yuan is being buoyed by appreciation on the back of a potential economic rebound in China, the currency could be at a relative low in the first half of this year, which could make now a good time to buy for investors.
The bank said that for less risk-averse investors, the percentage of yuan weighting in their portfolios could rise to 25 percent.
Chinatrust Bank said that as the currency-clearing agreement has set a daily conversion ceiling of 20,000 yuan for Taiwanese, investors would be advised to instruct their banks to convert pre-agreed amounts of NT dollar deposits into yuan deposits to a fixed schedule. Chinatrust investors can conduct yuan conversions over the telephone, it said.
In related news, the amount of currency issued for the NT dollar totaled NT$1.873 trillion (US$62.96 billion) yesterday — the last working day before the Lunar New Year holiday — the central bank’s latest data showed.
The amount was up NT$129.2 billion, or 7.41 percent, from the NT$1.744 trillion recorded on the last working day before the Lunar New Year holidays last year, the bank said yesterday.
The amount of currency issued is affected by seasonal factors, general economic conditions and institutional factors. Within a year, the most significant seasonal factor is the Lunar New Year, the bank said.