Yuan deposits held by local banks gained 0.42 percent, or 1.09 billion (US$158.22 million), to 261.03 billion yuan last month, as clients increased holdings to meet cash flow needs at the beginning of the year, the central bank said yesterday.
However, the year-end balance represented a decline of 12.53 percent from December 2018, shrinking for the third consecutive year, as the US-China trade dispute further dampened interest in the Chinese currency, the bank said.
For last month, yuan deposits by domestic banking units rose 0.02 percent to 229.01 billion, while rising 3.38 percent to 32.02 billion at offshore banking units, it said.
The yuan supply became tighter last month, driving up short-term borrowing costs and allowing the currency to recover some popularity, the central bank said.
That explained why three-month interest rates on yuan deposits stood at 3 percent at Bank SinoPac (永豐銀行), higher than 2.65 percent for 12-month yuan deposits at Sunny Bank (陽信銀行), it added.
Last month’s increase in yuan deposits was also related to Taiwanese electronics firms wiring money to support operations in China, shooting up remittances by 28.3 percent to 77.35 billion yuan, the central bank said.
However, yuan remittance through offshore banking units dropped 7.75 percent to 45.7 billion yuan, as cross-strait trade settlements lost steam, the bank said.
Still, Taiwan has the second highest yuan deposits in the world, after Hong Kong’s 637.8 billion, but ahead of Singapore’s 122 billion and South Korea’s 9.6 billion, it said.
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