Local banks may start accepting yuan deposits next week at the earliest, the central bank said at a meeting yesterday.
The central bank and the Bank of China’s (中國銀行) branch in Taipei — China’s yuan-clearing bank in Taiwan — invited all domestic banking units (DBUs) in Taiwan that are qualified to conduct yuan operations at a forum yesterday.
Central bank Deputy Governor Yang Chin-lung (楊金龍) said that DBUs may theoretically start accepting yuan deposits on Wednesday next week, after submitting their applications and the required documents to the Bank of China for approval.
The Bank of China said that the preparatory works may take longer than expected, after holding discussions with more 300 representatives from 68 banks to familiarize them with yuan-transaction procedures.
A DBU may need to sign a clearing agreement for yuan transaction with the Bank of China and open an account for yuan business operations before being granted permission to start accepting yuan deposits, the bank said in a statement.
Following the agreement on yuan deposits and loans, the central bank said it planned to negotiate with its Chinese counterpart to set up a currency-swap mechanism, which is a prerequisite for Taiwan to add yuan-based assets to the central bank’s foreign exchange reserves.