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UOB doubles yuan deposits from a year ago
UNITED Overseas Bank (UOB) on Thursday said its renminbi (RMB) or yuan deposits in Singapore have doubled over the last 12 months, reflecting stronger trade investments between China and South-east Asia.
In 2015, nearly half of the companies that worked with UOB to expand into South-east Asia were from China, spanning industries such as real estate, trading, natural resources and consumer products and services.
The banks said clients are increasing their RMB deposits in Singapore - an offshore RMB hub - to cut foreign exchange conversion and hedging costs.
UOB's financial institution clients are also accumulating RMB deposits in Singapore to diversify their funding base. The yuan was accepted by the International Monetary Fund to be part of the Special Drawing Rights basket.
"The use of offshore RMB was previously driven primarily by trade between China and Hong Kong but now, it is increasingly fuelled by rising business flows between China and Southeast Asia," said Ben Chan, head of RMB solutions at UOB.
"Despite the slowdown in China's economy, we expect to see continued interest from our Chinese corporate clients to invest in Southeast Asia to meet the region's expanding needs for infrastructure and consumer products."