Taiwan's enjoying advantages as offshore Chinese yuan hub: official
March 29, 2014, 12:09 am TWN
TAIPEI -- Taiwan has a better environment for developing a large offshore center for the Chinese yuan compared with London and Singapore, said Perng Fai-nan (彭淮南), governor of the island's central bank, Thursday.
Perng said that was because Taiwan has signed a trade-in-services agreement with China and both sides could also ink a trade-in-goods pact in the future, which is conducive to developing an offshore Chinese yuan center in Taiwan.
He did not express worries about the services agreement facing strong protest by students and others in Taiwan this month and being stalled in the legislature for months.
Instead, he pointed out that Taiwan banks' clearing functions are better than those in London and Singapore.
In late August 2012, Taiwan and China signed an agreement to set up a currency clearing mechanism. Since Feb. 6, 2013, banks operating in Taiwan have been allowed to conduct yuan-denominated transactions, including deposits, lending and remittances.
Bank of China's Taipei branch has served as the settlement bank for yuan transactions in Taiwan since then.
Chinese-yuan deposits in Taiwan's banking system reached 247 billion yuan (US$40.2 billion) as of the end of February.
Bank of Taiwan's Shanghai branch, meanwhile, has been in charge of Taiwan dollar transaction settlements in China.