Yuan deposits held by local banks last month rose by 0.08 percent, a gain of 196 billion yuan (US$27.71 billion) to 252.13 billion yuan as corporate accounts increased holdings and retail clients trimmed positions, the central bank said yesterday.
The figure ended two months of declines, but does not yet reflect steep interest rate cuts introduced by the Bank of China’s (BOC, 中國銀行) Taipei branch, it said.
BOC Taipei has lowered interest rates on deposits of all tenures by more than 1 percentage point in keeping with monetary-easing policies implemented around the world.
Interest rates for one-year yuan-denominated time deposits stand at 1.32 percent, 1.09 percent for six-month deposits, 0.95 percent for three-month deposits and 0.59 percent for one-month deposits, BOC Taipei said.
The rates prior to the adjustments ranged from 1.91 percent to 2.49 percent, the central bank said.
Taiwanese banks would have to do the same to stay viable, the central bank said.
Mega International Commercial Bank (兆豐商銀) offers interest rates of 2.4 percent for three-month yuan-denominated time deposits, while Sunny Bank (陽信銀行) offers 2.45 percent for one-year deposits, the central bank said.
People seeking to park money in yuan deposits would have to weigh an imminent fall in interest income, it said.
Last month, yuan deposits at Taiwanese banks’ domestic banking units increased from 219.86 billion yuan to 220.53 billion yuan as corporate accounts raised stakes to meet redemption demand, the central bank said.
Three yuan-based bonds are about to mature and customers prefer cash in times of market tumult, it said.
The conservative sentiment weakened yuan deposits at Taiwanese banks’ offshore banking units from 32 billion yuan to 31.6 billion yaun, it said.
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