Taipei, Chinese yuan deposits held by banks in Taiwan fell to the lowest in six and a half years at the end of July, due to a drop in interest rates, according to the central bank.
Central bank data showed yuan deposits in domestic banks dropped to 240.99 billion yuan (US$34.83 billion) in July, down 184 million yuan from the previous month.
It was the lowest level since February 2014, when yuan deposits stood at 247.05 billion yuan, according to the data.
A continued decline in interest rates on the yuan made the currency less attractive to many investors, who moved their funds into other holdings, the central bank said.
Yuan deposits hit their all-time high of 338.22 billion yuan in June 2015, but fell below 300 billion at the end of 2018 and have been mostly in decline since then.
The domestic banking units (DBUs) of local banks have been conducting yuan-denominated transactions since February 2013. Prior to that, only offshore banking units (OBUs) were allowed to carry out yuan transactions.
At the end of July, yuan deposits at the DBUs rose 969 million yuan from a month earlier to 209.23 billion yuan, as many enterprises were remitting yuan-denominated earnings back to Taiwan, according to the central bank.
However, yuan deposits at the OBUs fell US$1.15 billion from a month earlier to 31.76 billion in July, as many retail investors were discouraged by falling interest rates, the central bank said.
Meanwhile, yuan-denominated remittances in July totaled 120.51 billion yuan, down from 135.62 billion in June, the data showed.
Remittances through DBUs were 82.17 billion yuan in July, up from 72.91 billion yuan in June, while those via OBUs dropped to 38.34 billion from 62.71 billion yuan the previous month, according to the central bank.
Source: Focus Taiwan News Channel