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Taiwan's Chinese yuan deposit remittances hit high in October

Taiwan's Chinese yuan deposit remittances hit high in October

Taipei, Nov. 18 (CNA) Chinese yuan-denominated remittances through the local banking system in Taiwan in October hit a new high since the local central bank lifted a ban to allow local banks to conduct yuan transactions in February 2013.
Statistics compiled by the central bank showed that yuan remittances through domestic banking units (DBUs) and offshore banking units (OBUs) of Taiwanese banks in October totaled 200.444 billion (US$52.75 billion), up more than 62 percent from a month earlier, when the figure stood at 123.17 billion yuan.
Market analysts said that the spike in yuan remittances largely reflected local investors' rush to send yuan funds out of Taiwan in preparation for the Shanghai-Hong Kong Stock Connect trading platform, which was launched Monday.
The stock link is a mechanism through which foreign investors will be able to trade Chinese A-shares in Hong Kong, and investors in Shanghai will be able to trade Hong Kong shares in China.
Companies listed on China's exchanges offer two classes of shares: A shares denominated in Chinese yuan for Chinese investors to trade and B shares denominated in U.S. dollars or Hong Kong dollars for foreign investors to trade.
Analysts said that Taiwanese investors tended to entrust local securities with opening accounts in Hong Kong last month to pick up A shares in Shanghai through the new platform.
In addition, local investors operating in China transferred funds denominated in the yuan to their production bases there for day-to-day business operations as they took increasing orders from foreign buyers.
Of the yuan remittances in October, DBUs of Taiwanese banks made up of 124.02 billion yuan, up from 74.94 billion yuan recorded a month earlier, while yuan remittances through OBUs rose to 76.42 billion yuan from September's 48.24 billion yuan.
Central bank statistics showed that yuan-denominated deposits taken by DBUs of Taiwanese banks at the end of October fell slightly to 245.70 billion yuan from 248.21 billion yuan recorded at the end of September.
That marks the first time for DBUs to suffer a decline in yuan deposits they received since they started dealing with yuan transactions last year.
The central bank said the decline was because investors were withdrawing deposits to repay yuan-denominated debt.
At the end of October, yuan deposits at OBUs totaled 54.81 billion yuan, up from 52.22 billion yuan recorded at the end of September. Taking both ODUs and OBUs into account, yuan deposits taken by Taiwanese banks at the end of October rose 0.03 percent from a month earlier to 300.52 billion, the statistics showed.
The central bank said that yuan-denominated discounts and lending at Taiwanese banks totaled 17.15 billion yuan at the end of October, down from 18.38 billion registered at the end of September.
At the end of October, Taiwanese banks operated 67 DBUs and 59 OBUs, the central bank said. (By Pan Chi-i and Frances Huang)