Yuan deposits held by local banks last month declined 3.89 percent from one month earlier to 174.425 billion yuan (US$25.37 billion), the lowest in nine years, as corporate and retail clients cut yuan holdings in favor of New Taiwan dollar and US dollar-denominated assets, the central bank said yesterday.
US dollar-based investment vehicles remain popular on the back of high interest rates even though the US Federal Reserve is said to be about to end the monetary tightening cycle, the central bank said.
Onshore yuan deposits include those at local banks’ domestic banking units (DBUs) and their offshore banking units (OBUs) in Taiwan.
Photo: REUTERS
The monthly decrease of 7.056 billion yuan from 181.481 billion yuan in February came as yuan deposits at DBUs decreased 4.09 percent from the previous month to 147.279 billion yuan, while those at OBUs fell 2.78 percent to 27.146 billion yuan, an indication that people continued to lose interest in the Chinese currency.
The central bank said the monthly drop of 6.279 billion yuan deposited at DBUs last month was mainly due to the remittance of yuan by major electronics manufacturers to pay for triangular trade, in which orders are taken in Taiwan for goods made abroad, mostly in China, the central bank said.
Additionally, some manufacturers in traditional industries last month converted their yuan-denominated income into New Taiwan dollars, which also reduced the overall balance of yuan deposits, it said.
Data compiled by the central bank showed that Hwatai Bank (華泰銀行) offered the highest interest rate of 1.3 percent for one-month yuan deposits among local lenders, while Sunny Bank (陽信銀行) had the highest interest rates for three-month and six-month yuan deposits at 1.9 percent and 2 percent respectively.
Separately, the number of bank branches in Taiwan fell to 3,384 at the end of last year, hitting the lowest in nine years, as banks focused more on digital banking to satisfy consumer demand, data compiled by the Financial Supervisory Commission showed on Tuesday.
That was down by 76 branches from the peak of 3,460 at the end of 2014, the commission said.
From 2014 to last year, banks closed 127 branches and opened 57 new branches, with the shutdown of 23 branches last year marking the highest during the period, it said.
Standard Chartered Bank Taiwan (渣打台灣) closed 12 branches, and DBS Bank Taiwan (星展台灣) and HSBC Bank Taiwan Ltd (?豐台灣商銀) shut five and four branches respectively last year, commission data showed.
Additional reporting by Kao Shih-ching
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