Renminbi becomes Taiwan's 5th favourite foreign unit of currency

TAIPEI, Taiwan -- Renminbi- (RMB) denominated deposits against total foreign currency deposits in Taiwan rose to a record-setting 6.2 per cent in late May, becoming the fifth major foreign currency unit after the greenback, British pound, Hong Kong dollar and yen.

Since Taiwan opened for RMB business last February, Taiwan's RMB liquidity pool has been expanding rapidly. RMB deposits at domestic banking units in Taiwan expanded to 233 billion RMB at the end of May, although mainland authorities intentionally began allowing the RMB to depreciate starting from early 2014.

Due to strong buying into RMB, RMB-denominated deposits vis-à-vis total foreign currency deposits in Taiwan rose to a fresh high of 6.2 per cent at the end of May, compared with 0.3 per cent last February, edging itself to become Taiwan's fifth favoured foreign currency.

The RMB is expected to remain stable with slight appreciation three years down the road, analysts said.

Mega International mutual fund manger Li Wu-han (李武翰) told the United Evening News that RMB products have more relative competitive edge than other foreign currency-based products.

After comparing the interest income for one-year time deposits between the New Taiwan dollar, the greenback and RMB, Li said that RMB outshines the other two with an annual rate of 1.75-2.7 per cent.

Predicting that the depreciation of RMB will soon be over, Manulife fund manager Chen Pei-lun (陳培倫) said that he expects RMB, in the support of recovery of China's economy, would reverse the downtrend and pick up again in the second half.