Risk-cutting RMB remittance service set to open this month
By Kathryn Chiu ,The China PostTAIPEI, Taiwan -- The long-awaited direct Chinese renminbi (RMB) remittance service, a program that will drastically reduce risks in foreign exchange conversions for individuals and businesses across Taiwan, will be launched as scheduled on Sept. 30.
September 26, 2013, 12:05 am TWN
The service is a result of a long-term collaboration between Financial Information Service Co. (FIC) and China-based Bank of China (BOC), Taipei Branch.
BOC Taipei was designated by mainland China's regulatory agency as the RMB settlement bank in Taiwan.
However, Taiwan's Central Bank has yet to designate a New Taiwan dollar settlement bank in China.
The Financial Supervisory Commission (FSC) yesterday told the Central News Agency that the new service covers RMB remittance islandwide.
According to a Council for Economic Planning and Development publication, March saw Taiwan launch a new foreign-exchange settlement platform which conforms to the standards of the Society for Worldwide Interbank Financial Communication (SWIFT).
SWIFT initially started out with U.S. dollar settlement and was later set up to handle RMB and other currencies.
The soon-to-be-available service allows Taiwan-based banks to directly carry out RMB settlements, without having to go offshore. This will not only save inter-bank processing time, but also help enterprises and individuals save conversion costs.
Fast-growing investments and increasing travels between Taiwan and China have been strengthening the demand for the currencies of both sides, particularly the RMB.
Taiwan's investment in China has grown significantly since 1987, when the New Taiwan dollar started to appreciate against the U.S. dollar. The accumulated amount of Taiwanese investment in China has now reached well over US$110 billion, while annual bilateral trade between Taiwan and China amounts to US$150 billion.
It is estimated that free exchange of RMB and New Taiwan dollar, the ultimate goal of RMB business development, will help save US$1 billion to US$1.5 billion of conversion costs each year.