Central bank Deputy Governor Yang Chin-lung (楊金龍) yesterday urged domestic financial institutions to develop more yuan-based products to help the nation develop into an offshore yuan trading center.
“Now is the best time to expand the market of Formosa bonds (寶島債) and develop multiple yuan-based financial products,” Yang said during a launch ceremony for Clearstream International — one of Europe’s biggest clearers and settlers of securities trades — opening an account at Taiwan Depository and Clearing Corp (台灣集中保管結算所).
Taiwan has seen some positive effects in developing offshore yuan businesses, after domestic banks started to accept deposits and make loans in yuan in February last year, Yang said.
Yuan deposits in the domestic banking system reached 268.39 billion yuan (US$43.14 billion) at the end of last month — 211.86 billion in domestic banks and 56.53 billion in offshore banking units, central bank data showed.
As the funding pool of yuan increases substantially, Yang said it is a good opportunity to develop multiple yuan products.
Local financial institutions have been developing new products in derivatives, insurance and funds, with a total amount of 12.1 billion yuan invested in 15 Formosa bonds already issued, he said.
Taiwan must also renovate its financial market infrastructure and establish a clearing platform for foreign currencies, he added.