Yuan de­posit growth at Tai­wanese banks promis­ing: an­a­lysts

The China Post - - TAIWAN BUSINESS -

A record high in main­land yuan de­posits taken by banks reg­is­tered in Tai­wan as of the end of March show op­ti­mism that the Chi­nese cur­rency will ap­pre­ci­ate against the U.S. dollar in the long run, an­a­lysts said.

They said that the main­land is gear­ing up to set up its Asia In­fra­struc­ture In­vest­ment Bank (AIIB), a move that is ex­pected to fur­ther boost the visibility of the yuan in the global mar­ket, paving the way for a higher val­u­a­tion of the cur­rency against the green­back.

As China’s econ­omy grew only 7 per­cent in the first quar­ter of this year, the slow­est pace in six years, the mar­ket widely an­tic­i­pates that the Bei­jing gov­ern­ment will come up with more mea­sures to stim­u­late the econ­omy, an­a­lysts said.

As a re­sult, the an­a­lysts said, there have been stronger yuan ex­pec­ta­tions among many in­vestors, prompt­ing them to raise the yuan hold­ings in their in­vest­ment port­fo­lios.

Ac­cord­ing to the cen­tral bank, the bal­ance of the yuan de­posits taken by Tai­wanese banks’ do­mes­tic bank­ing units (DBUs) and off­shore bank­ing units (OBUs) as of the end of March to­taled 324.58 bil­lion yuan (NT$1.63 tril­lion; US$51.93 bil­lion), up from 318.77 bil­lion yuan recorded a month ear­lier.

Yuan de­posits taken by the banks’ DBUs as of the end of March rose 6.52 bil­lion yuan, or 2.45 per­cent, from a year ear­lier to 272.57 bil­lion yuan, while the bal­ance of yuan de­posits at the banks’ OBUs fell 705 mil­lion yuan or 1.33 per­cent to 52.01 bil­lion yuan, the cen­tral bank data shows.

The cen­tral bank lifted a ban to al­low lo­cal banks’ DBUs to con­duct yuan- de­nom­i­nated busi­ness, in­clud­ing yuan de­posits, in Fe­bru­ary 2013. Be­fore the ban was re­moved, only banks’ OBUs had been al­lowed to con­duct yuan- de­nom­i­nated trans­ac­tions.

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