The central bank announced yesterday that the Chinese yuan has been added to the nation’s clearing platform for foreign currencies, which may pave a way for developing Taiwan into the second yuan offshore center.
The move may also help lower the finance sector’s costs and reduce fund procurement risks, further encouraging local banks to cut the service fees for business transactions in the yuan, the central bank added.
COSTS AND RISKS
The central bank invited Financial Information Service Co Ltd (財金資訊) and the Bank of China’s (中國銀行) branch in Taipei — the clearing bank for the yuan in Taiwan — to prepare for the move to include the yuan into the clearing platform in March, with the service officially launched yesterday.
The yuan is the second currency to be added to the nation’s clearing platform, following the introduction of the US dollar, started by Mega International Commercial Bank (兆豐國際商業銀行) in March.
The new measure may help financial institutions save costs for transferring funds in the yuan, while accelerating the pace of business in yuan transfers into same-day full payment transactions, if conducted before 4pm, the central bank said in a statement.
Central bank Deputy Governor Yang Chin-lung (楊金龍) called on local banks to lower service fees for Chinese yuan transfers to benefit the public.
Based on the experience of US dollar clearance, the service fee has been reduced to between NT$320 and NT$1,240, down from between NT$720 and NT$1,580 before the platform was built, the bank said.
EURO AND YEN
The bank may further evaluate the feasibility of adding the euro and Japanese yen into the platform, Yang added.
A total of 143 cross-country transfers of Chinese yuan, totaling 292 million yuan (US$47.7 million), was adopted via the clearance platform yesterday. This combined with 130 million yuan in 87 domestic transfers, statistics from Finance Service showed.