Too soon for yuan forex on Taiwan proper: MAC chief

It is premature to talk about implementing New Taiwan dollar-yuan currency exchange services on Taiwan proper, as a trial service has just recently begun on Kinmen and Matsu, Mainland Affairs Council (MAC)Chairman Joseph Wu (吳釗燮) said yesterday.

The government is still assessing the exchange service that was launched earlier this month on a trial basis and no policy adjustments have been made to extend the service, he said.

A final decision must be made jointly by the MAC and National Security Council based on a comprehensive evaluation.

"We have not received any instructions so far from the Executive Yuan about the issue and it is important to closely watch how the service fares on the two islands before making the next move," Wu said.

He dismissed a media report that the government has linked the issue to a planned opening of Taiwan to Chinese tourists.

Earlier yesterday Premier Frank Hsieh (謝長廷) told a financial industry meeting that the exchange service may be put in place in Taiwan as long as the trial program is successful.

The absence of a cross-strait currency-exchange service has resulted in rampant black market trading and increased management difficulties for the government, Hsieh said.

He said, however, that a service through a government channel would benefit both the government and the public.

For instance, the public would not have to worry about being given fake notes, while the government would be able to earn some extra revenue.

But to make the service possible in Taiwan, the two sides of the Taiwan Strait need to first set up a set of currency-settlement mechanisms to handle large scale operations, the premier said.

It was the second time Hsieh has made remarks about the issue within a week.

He first mentioned the issue last Thursday during a breakfast gathering sponsored by the Chinese National Association of Industry and Commerce (工商協進會), during which he promised to seriously consider allowing the practice in Taiwan as soon as possible.

Executive Yuan Secretary-General Cho Jung-tai (卓榮泰) told a legislative committee that the premier had not spelled out a timetable or deadline at last week's meeting for the implementation of a yuan-forex service in Taiwan.