Renminbi-denominated deposits in Taiwan fall in June

First monthly drop since OBU scheme began July 2011.

Renminbi-denominated deposits through the offshore banking unit (OBU) scheme in June reached US$117.8 billion, down US$244 million or 4.7%. It is the first month-on-month decline since the Financial Supervisory Commission approved the OBU scheme in July 2011. The government reported the reduction ended the steady growth of renminbi-denominated deposits.

OBUs are offshore branches of banks that have received approval to operate banking and other financial services in a foreign host country. Bankers said the decline in renminbi-denominated OBU deposits was due to the policy-driven credit crunch imposed in China in late June.

The crunch resulted in fund withdrawals by China-based Taiwanese enterprises for urgent needs. Taiwan’s central bank stated that since August 2011, renminbi-denominated OBU deposits have grown steadily from US$116 million to a high of US$118 billion recorded in May.