Tai­wan’s yuan de­posits down in July on main­land woes

The China Post - - TAIWAN BUSINESS -

Chi­nese yuan- de­nom­i­nated de­posits held by banks op­er­at­ing in Tai­wan were lower at the end of July from a month ear­lier on ris­ing aware­ness of the down­side risks in China’s econ­omy, ac­cord­ing to an­a­lysts.

An­a­lysts said re­cent volatil­ity in share prices in China’s eq­uity mar­kets and in­ter­est rate cuts in July by the Peo­ple’s Bank of China (PBOC), China’s cen­tral bank, also led some cur­rency in­vestors in Tai­wan to opt against in­creas­ing their hold­ings of the Chi­nese cur­rency.

Ac­cord­ing to sta­tis­tics com­piled by Tai­wan’s cen­tral bank, the bal­ance of yuan de­posits re­ceived by banks in Tai­wan as of the end of July fell 1.57 bil­lion yuan (US$245 mil­lion), or 0.47 per­cent, from a month ear­lier to 336.65 bil­lion yuan.

It was the first time that yuan de­posits in Tai­wan had fallen month-on-month since the coun­try’s cen­tral bank be­gan al­low­ing lo­cal banks’ do­mes­tic bank­ing off­shore units (DBUs) to of­fer yuan-de­nom­i­nated ser­vices, in­clud­ing yuan de­posits, in Fe­bru­ary 2013.

Un­til the ban was re­moved, only banks’ off­shore bank­ing units (OBUs) had been al­lowed to con­duct yuan- de­nom­i­nated trans­ac­tions.

Yuan de­posits held by Tai­wanese banks’ DBUs to­taled NT$282.92 bil­lion yuan as of the end of July, down from 283.39 bil­lion yuan a month ear­lier, the data showed.

The bal­ance of yuan de­posits at the banks’ OBUs also fell to 53.73 bil­lion yuan from 54.83 bil­lion yuan, ac­cord­ing to the fig­ures.

Ex­pec­ta­tions are that yuan de­posits held by Tai­wanese banks will con­tinue to fall in Au­gust af­ter the PBOC cut the yuan’s ref­er­ence rate sharply against the U. S. dol­lar in re­cent ses­sions to send the Chi­nese cur­rency into a tail­spin.

Tai­wan’s cen­tral bank con­tended, how­ever, that it was too early to say whether yuan de­posits held by Tai­wanese banks will fall fur­ther as the yuan re­mained rel­a­tively strong com­pared with the Tai­wan dol­lar.

Ac­cord­ing to the cen­tral bank, de­spite heavy losses suf­fered by the yuan last week, the Chi­nese cur­rency has fallen about 3.78 per­cent against the U. S. dol­lar in the past 12 months, but the Tai­wan dol­lar has shed 6.78 per­cent against the green­back dur­ing the same pe­riod.

The cen­tral bank fig­ures also showed that yuan-de­nom­i­nated lend­ing and in­ter­bank loans at the DBUs and OBUs as of the end of July rose 0.21 per­cent from a month ear­lier to 28.09 bil­lion yuan.

At the same time, yuan- de­nom­i­nated re­mit­tances through these DBUs and OBUs fell 10.83 per­cent from a month ear­lier to 265.3 bil­lion as of the end of July, the fig­ures showed.

Cur­rently, Tai­wanese banks op­er­ate 69 DBUs and 59 OBUs, the cen­tral bank said.

AP

In this Tues­day, Aug. 11 file photo, a bank clerk counts Chi­nese cur­rency notes at a bank out­let in Huaibei in cen­tral China’s An­hui province. Chi­nese yuan-de­nom­i­nated de­posits held by banks op­er­at­ing in Tai­wan were lower at the end of July from a month ear­lier.

Newspapers in English

Newspapers from Taiwan

© PressReader. All rights reserved.