FOREIGN EXCHANGE | Staff Reporter, Taiwan

Taiwanese banks' yuan deposits shrinks to 4-year low in December

This represents the third straight month of decline.

Yuan deposits parked at Taiwanese banks continued to fall with the amount falling below the $44.21b (CNY300b) mark for the first time since September 2014 amidst the protracted yuan weakness, reports Focus Taiwan.

Data from Taiwan’s central bank revealed that yuan deposits marked its third straight month of decline at $44.08b (CNY298.44b), down by $495.18m (CNY3.36b) from November.

Also read: Trade tensions to cut Taiwanese 2019 bank loan growth to 3.2%

The central bank added that the decline in yuan deposits reflect payment by Taiwanese electronic firms for overseas purchases even as yuan holdings by retail currency investors remained flat.

Banks in Taiwan have considerable overseas exposure particularly to China where exposure levels have been rising since 2010, data from S&P Global Ratings show. In 2015, the balance of yuan deposits at banks hit an all-time high of $49.85b (CNY338.22b).

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The central bank noted that local banks have promoted higher interest rates in December to lure yuan deposits, with Jih Sun Bank offering 3.7% on one-year CNY deposits and 3.4% on nine-month and six-month deposits. Land Bank of Taiwan offered 3.4% on six-month deposits which is the highest rates amongst local banks. 

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