Tue, Aug 16, 2011 - Page 12 News List

Banks eager for plan on cross-strait trade settlements

By Amy Su  /  Staff Reporter

Local banks yesterday welcomed a central bank proposal to build a cross-strait currency settlement mechanism between the New Taiwan dollar and the Chinese yuan to reflect rising market demand, bank officials said yesterday.

“Many of our customers hope to settle their cross-strait trade with yuan, because they assume the yuan will keep appreciating in the long term,” Larry Hsu (許俊仁), head of capital markets at Chinatrust Commercial Bank (中國信託商業銀行), told a media briefing.

Although the central bank said companies could avoid the exchange-rate risk when settling trade across Taiwan and China with NT dollars, many firms still prefer holding yuan, Hsu added.

Constructing a cross-strait currency settlement mechanism could also help boost the business of settlement fees for local banks, Mega International Commercial Bank (兆豐國際商銀) senior vice president Hong -Ching-lung (洪慶隆) said.

Central bank Deputy Governor George Chou (周阿定) said yesterday that the bank would keep to its original schedule for charging with the settlement mechanism by talking with China’s central bank in the second half of the year.

“The bank has created a special task force to research the related issues,” Chou told reporters.

The central bank sent representatives to Beijing in October last year to discuss building the settlement mechanism with the People’s Bank of China, Chou said, adding that the two sides have contacted each other three times this year.

However, Chou refused to promise any progress by year’s end, saying: “Neither side will reveal any detailed content until the negotiations end.”

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