FSC to have meeting on currency clearing

The conference, which follows an earlier memorandum of understanding (MOU) signed by China and Taiwan, will provide a communication platform for both sides' banking and finance industries, the Financial Supervisory Commission (FSC) said.

The conference will discuss issues concerning investment in Taiwan's stock and bond markets by mainland entrepreneurs, as well as define the investment parameters for businesses and investors on both sides, according to the FSC.

The commission said that the conference, which is expected to be followed by more, will be headed by FSC Chairman Chen Yuh-chang (陳裕璋) and China Securities Regulatory Commission Chairman Guo Shuqing (郭樹清). The FSC also said the meeting will help build a foundation for future communication over the clearance mechanism.

Guo's delegation is scheduled to arrive in Taiwan today, and is to depart Wednesday.

Effect on Fluid Currency

It is necessary to build an official communication channel to reinforce the cooperation and monitoring of the cross-currency clearance mechanism for the New Taiwan dollar and renminbi, the FSC said.

Under the MOU, signed in September last year, monetary authorities on both sides designated one local bank each to provide currency clearing and settlement services, according to Taiwan's central bank.

The large number of exports from Taiwan has been putting pressure on Beijing to liberalize its currency settlement mechanism, according to the Central Bank of the Republic of China (Taiwan). A clearance mechanism could save huge amounts in foreign exchange costs for Chinese importers.

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