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Chinese yuan deposits hit new high in June

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(Globalpost/GlobalPost)

By Lee Minji

SEOUL, July 4 (Yonhap) -- Chinese yuan deposits at banks in South Korea took up 20.3 percent of all foreign currency deposits for the first time in June, hitting a fresh high, central bank data showed Friday.

The Chinese yuan-denominated deposits held by residents reached US$12 billion in June, up $640 million from the previous month, according to the Bank of Korea (BOK). The June figure marks the first time the portion of yuan deposits surpassed the 20 percent level since the central bank began compiling the data in September 2000.

Residents cover local citizens, foreign companies and foreigners staying here for more than six months. The data excludes inter-bank foreign currency deposits.

Yuan deposits have been trending higher since last year, with monthly gains reaching a record $2.5 billion in November 2013.

The on-month gain in June, however, slowed from a $1.4 billion increase in May as funding costs rose, the central bank explained in a press release.

"Monthly gains may again accelerate if funding conditions change. But it seems unlikely that on-month gains will rebound to record levels for the time being," said a BOK official.

Overall foreign currency deposits came in at $59 billion, slipping from a record high of $59.6 billion in May.

Dollar-denominated deposits fell $1.4 billion from a month earlier to $40.7 billion as companies' demand for loan redemption increased at the end of the quarter.

The portion of dollar-denominated deposits fell below the 70 percent-mark for the first time since September 2004, according to the central bank.

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http://www.globalpost.com/dispatch/news/yonhap-news-agency/140703/chinese-yuan-deposits-hit-new-high-june