Chinese yuan-denominated deposits in local banks rose a mere 0.1 percent month-on-month at the end of last month, revealing that investors are taking a cautious approach to China’s foreign-exchange policies, market analysts said.
The central bank said the balance of yuan-denominated deposits in domestic banking units (DBUs) and offshore banking units (OBUs) totaled 293.03 billion yuan (US$47.64 billion) as of the end of last month, up 2.88 billion yuan, or 0.1 percent, from a month earlier.
The amount was shy of analysts’ earlier forecasts of 300 billion yuan.
The 0.1 percent month-on-month rise was the slowest pace of growth since the DBUs belonging to local banks were allowed to conduct yuan-denominated transactions involving deposits, lending and remittances in February last year.
Taiwan and China signed an agreement in August 2012 to set up a yuan-clearing mechanism that paved the way for local banks to engage in yuan-denominated transactions.
As of the end of last month, yuan deposits at domestic banking units rose 902 million yuan, or 0.38 percent, from a month earlier to 240.99 billion yuan, while yuan deposits in offshore banking units fell 614 million yuan, or 1.16 percent, to 52.04 billion yuan, central bank statistics showed.
Analysts said although the yuan has recently appreciated against the US dollar, investors appear to have limited interest in raising their Chinese currency holdings in Taiwan. They are still keeping a close eye on how far the Chinese authorities will allow the unit to rise.
Although the growth of yuan deposits was slight last month, yuan deposits in domestic banks are showing a trend of increasing, in contrast to declines in yuan deposits in Hong Kong banks, the central bank said.
Yuan deposits in Hong Kong banks fell from 959.9 billion yuan at the end of April to 955.8 billion yuan at the end of May. They then dropped even further to 925.9 billion at the end of June, the central bank said.
The central bank said Taiwan’s yuan-denominated deposit business remains stable.
As of the end of last month, the outstanding yuan-denominated discounts and loans in domestic banks totaled 17.25 billion yuan, down 408 million yuan from the end of June.
The central bank said the decline reflected less short-term yuan lending during the period.
Meanwhile, derivative transactions conducted by local banks as at the end of June totaled NT$54.32 trillion (US$1.81 trillion), down 7.39 percent from the end of March, the central bank said.
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