TAIPEI, June 25 Bank of China's Taipei branch will raise overnight rates for yuan deposits in July in a bid to lure more yuan funds from Hong Kong, a source with direct knowledge of the matter said on Tuesday.
The branch, the clearing bank for the Chinese yuan in Taiwan, will lift the rates to 0.75 percent for deposits under 50 million yuan ($8.14 million), 0.86 percent for deposits between 50 million yuan and 100 million yuan and 1.05 percent for deposits bigger than 100 million yuan, said the source.
Currently, the rate stands at 0.648 percent.
Renminbi deposits in Taiwan have grown from zero to 60 billion yuan since banks were first allowed to accept them in February.
By contrast, the yuan deposit base in Hong Kong is more than 10 times that of Taiwan at more than 650 billion yuan, excluding outstanding bonds and bills.
But the yuan deposit base in Taiwan is expected to grow. Deutsche Bank estimates the island's renminbi deposit base will grow to 100 billion yuan by the end of 2013, and to 200 billion yuan in the next two to three years. ($1 = 6.1451 Chinese yuan) (Reporting by Lin Miao-jung; Writing by Faith Hung; Editing by Kim Coghill)