Perng hosts conference with 10 banks on RMB deposits across Taiwan
By Ted Chen ,The China PostR.O.C. Central Bank Governor Perng Fai-nan (彭淮南) yesterday invited 10 banks to a conference to discuss the status of renminbi-denominated deposits in Taiwan, while urging the financial sector to consider raising interest rates on deposits of foreign currencies.
September 24, 2013, 12:17 am TWN
The central bank stated that since February, Taiwan saw a rapid rise in renminbi-denominated financial services, marking the first sightings of tangible results since deregulation efforts began. In the same vein the central bank hopes to initiate a pilot program toward the end of September for a renminbi-clearing platform. The central bank urged domestic financial institutions to take part in the endeavor and participate in utilizing the Kunshan Experimental Zone's (昆山試驗區) currency flow mechanisms.
In addition, the central bank provided conference participants with a two-page report outlining the progress of establishing cross-border flow of funds denominated in renminbi and the latest developments in renminbi-based financial instruments.
The renminbi has become an invaluable financial management tool employed by Taiwan's investing public, said the central bank. However, in light of the rising popularity of the renminbi, the central bank yesterday urged financial institutions to address on behalf of Taiwan's investing public the pervading slump in interest rate yield assigned to foreign currency deposits.
The central bank stated that the Taipei-based branch of the Bank of China (中國銀行) is offering 3.95, 3.88, 3.9, 3.25, and 3.92 percent for fixed deposits spanning 1, 3, 6, 9, and 12 months. In contrast, the Bank of Taiwan (台灣銀行) is offering a significantly less appealing 0.85, 0.9, 1.15, 1.15 and 1.25 percent for fixed deposits of the same duration.
In response, a manager at one of Taiwan's most notable banks who did not wish to be named stated that although its listed fixed deposit rates are considerably lower than terms offered across the strait, investors may take advantage of its special programs, featuring significantly more appealing rates. The manager pledged that his company is mulling raising interest rates.
Domestic banks invited to yesterday's conference included the Bank of Taiwan, Mega International Commercial Bank (兆豐商銀), First Bank (第一銀), Cathay United Bank (國泰世華), and Taipei Fubon (台北富邦銀).