Yuan deposits held by local banks last month slipped by 0.45 percent, or 1.08 billion yuan (US$168.8 million), to a six-month low of 238.04 billion yuan, as retail and corporate investors shed holdings, the central bank said yesterday.
The latest balance marked the third straight month of decline, although the Chinese currency has gained value against the US dollar this year, Gloria Chen (陳婉寧), deputy director-general of the Department of Foreign Exchange, told an online news conference.
Domestic banking units saw demand deposits grow, while time deposits fell, because retail and corporate accounts preferred to take shelter in demand deposits amid uncertainty, Chen said, adding that some corporate accounts converted yuan-based receivables into the local currency.
Photo: Kelson Wang, Taipei Times
This was probably a result of expectations that the greenback’s downward trend would soon reverse up, Chen said.
The faster-than-expected recovery in the US from the COVID-19 pandemic has fueled speculation that the US Federal Reserve would start tapering talks earlier.
Yuan deposits at local banking units fell 0.62 percent to 206.3 billion yuan, the central bank said.
Offshore banking units reported a fractional 0.66 percent increase in yuan deposits to 31.74 billion yuan, it added.
Taiwan has the world’s second-largest offshore yuan deposits after Hong Kong’s 782 billion yuan, but ahead of Singapore’s 152 billion yuan and South Korea’s 11.4 billion yuan, Chen said.
Still, the yuan remains a major currency in circulation around the world, which is why local banks offer relatively high interest rates to attract yuan deposits, the official said.
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