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Many Taiwanese investors plan to hold more Chinese yuan: survey

Many Taiwanese investors plan to hold more Chinese yuan: survey

Taipei, March 7 (CNA) Survey results released Saturday show that many Taiwanese investors are planning to raise their holdings in the Chinese yuan, as the currency has become one of their most favorable investment instruments. Citibank Taiwan, which conducted the survey, said that 48 percent of the 536 respondents, aged 18 or older, who own bank accounts or hold credit cards, expressed willingness to buy into the yuan to expand their investment portfolios over the next six months. Lee Yun, head of Citibank Taiwan's consumer banking operations, said that almost half of the respondents would like to hold more yuan as they anticipate that that the currency is about to appreciate against the U.S. dollar. As of the end of January, yuan-denominated deposits received by banks operating in Taiwan totaled 310.2 billion yuan (US$49.63 billion), a record high, up 7.93 billion yuan as of the end of December, according to statistics compiled by the central bank. The central bank lifted a ban to allow local banks' domestic banking units to conduct yuan-denominated business, including yuan deposits, in February 2013, amid closer economic ties across the Taiwan Strait. Prior to the ban being lifted, only offshore banking units were allowed to conduct yuan-denominated transactions. The Citibank survey also indicated that 22 percent of the respondents said they have included the Chinese currency into their asset portfolios, in the form of either bank deposits or yuan-denominated mutual funds. Lee said that more and more people in Taiwan want to boost their deposits in a bid to allow them to have a comfortable retirement with a move to raise their yuan holdings seen as one of the ways to achieve this goal. While the Citibank survey shows the optimism toward an uptrend of the yuan value in the future, DBS Bank Taiwan expects that the Chinese currency will trend lower this year as the People's Bank of China (PBOC) continues to ease its monetary policy to boost China's economy. Starting from March 1, the PBOC lowered one-year deposit and lending rates by 25 basis points to 2.5 percent and 5.35 percent, respectively. It was the second rate cut by the Chinese central bank in three months. The DBS said the yuan is likely to fall to 6.38 yuan against the U.S. dollar by the end of this year. On Friday, the yuan was traded at between 6.2628 yuan and 6.2670 yuan against the greenback. The DBS said that although the yuan could fall in the short term, people are advised to hold the Chinese currency for a longer term, since the unit could benefit from the relatively high interest rates in China, compared with super-low rates in the U.S. (By Wu Ching-chun and Frances Huang)


Updated : 2021-09-17 05:12 GMT+08:00