Yuan deposits held by local banks last month posted a fractional gain of 173 million yuan (US$24.78 million) to 259.94 billion yuan, as corporate clients called in loans to their affiliates in China, the central bank said yesterday.
The gain ended two straight months of decline, even though retail clients continued to lose interest in the currency as an investment tool due to falling yields, the central bank said.
Yuan deposits at domestic banking units rose 220 million yuan to 228.96 billion yuan, while those at offshore banking units shed 47 million yuan to 30.98 billion yuan, the central bank said.
Corporate clients increased their holdings as a result of capital adjustments often seen toward the end of the financial year, it said.
In particular, some local companies called in loans made to affiliated firms in China, it added.
Individual retail clients continued to trim their positions after yuan interest rates declined, the central bank said.
Shanghai Commercial and Savings Bank (上海商業儲蓄銀行) offers the highest interest rate for one-month yuan deposits at 2.6 percent, while Bank SinoPac (永豐銀行) pays the highest rate for three-month yuan deposits at 3 percent, it said.
Sunny Bank (陽信銀行) provides the highest interest rate on nine-month yuan deposits at 2.45 percent, it added.
Year-end cash requirements likely explain why short-term deposits have higher borrowing costs, the central bank said.
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