Chinese yuan deposits held by local banks last month fell 1.95 percent from one month earlier to 241.63 billion yuan (US$2.87 billion) as local retail investors preferred equities over currency investments, the central bank said yesterday.
The latest yuan balance marked a four-month low and a monthly drop of 4.804 billion yuan, although yuan deposits deliver relatively high interest rates, compared with those of New Taiwan dollar deposits.
Overall, yuan-based demand deposits grew, but time deposits declined, the central bank said, adding that the number of retail accounts decreased and the number of corporate accounts increased.
Photo: Kelson Wang, Taipei Times
“The pace of trimming is faster than that of adding,” the central bank said, adding that the value of the yuan fluctuated within a range without evident direction, making it less attractive than local shares as an investment tool.
By contrast, the local bourse has benefited from liquidity-driven rallies, in line with expectations that the world would emerge from the COVID-19 pandemic in the second half of this year, the central bank said.
Taiwan’s economy this year is expected to post stronger growth than last year, thanks to robust demand for technology products and recovery in private consumption.
Capital at home and abroad would flow to financial assets that generate better yields, the central bank said.
Yuan deposits at offshore banking units softened by a drastic 13.12 percent to 31.67 billion yuan, due to an unfavorable base effect linked to financing arrangements by a major tech firm, the central bank said.
The local company converted sizable holdings in US dollars into Chinese yuan deposits in February to finance the issuance of convertible bonds by a subsidiary in China, the central bank said.
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