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Home›Macau›Yuan devaluation to impact RMB deposits

Yuan devaluation to impact RMB deposits

By -
Friday, August 14, 2015
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CHINA-US-ECONOMY-FOREX-YUANChina cut the reference rate for its currency for the third consecutive day yesterday. As the Central Bank continued to weaken the yuan by a further 1.1 percent yesterday, concerns have been raised within the global financial market.
In Macau, banks could see deposits in Chinese yuan experience a decrease, BNU told the Times in an email. The bank said that this has coincided with “a recent overall trend of decreasing Chinese yuan deposits in banks.”
On the other hand, the bank said that the incentive to borrow in the Chinese currency will increase, concurrently with a lower interest rate in RMB.
“The devaluation of RMB may have greater effects on banks that have open positions in RMB, or when they lend in RMB and receive deposit in other currencies such as Hong Kong dollars, patacas, or U.S. dollars,” it said, adding that the devaluation of China’s currency may also have a greater impact on banks that have larger assets valued in yuan.
BNU reiterated, however, that the bank has no open position in RMB, nor do they practice operations in which they take money from HKD/MOP/USD deposits and provide loans in RMB.  CP

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