Yuan deposits reach record high of $640 million in June

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Yuan deposits reach record high of $640 million in June

Published: 04 Jul. 2014, 20:06

Yuan deposits at banks in Korea inched up by a net $640 million in June to a record high of $11.97 billion, central bank data showed yesterday, but the rate of increase slowed due to an increase in yuan borrowing costs.

It was the 12th straight month that total yuan deposits reached a record high, according to data from the Bank of Korea, but yuan deposit increases have been slowing since reaching $2.02 billion in April and $1.42 billion in May.

The data comes a day after Chinese President Xi Jinping agreed with President Park Geun-hye on a series of steps aimed at spurring offshore use of the yuan.

But a Bank of Korea official said the establishment of a direct market between the two currencies would not necessarily lead to an increase in yuan deposits in local banks, as it would take time for the market to become fully active.

Foreign currency deposits as a whole fell by $680 million in June to $58.95 billion, mainly on a fall in U.S. dollar deposits.

U.S. dollar-denominated deposits fell by $1.42 billion in June to $40.67 billion, accounting for 69 percent of total foreign-currency deposits at the end of June, compared to the yuan’s 20.3 percent, the data showed.