Taiwanese businesses in China yesterday welcomed the government's move to allow offshore banking units (OBUs) of Taiwanese banks to conduct yuan transactions and urged more liberalization on cross-strait banking in the near future.
The Bureau of Monetary Affairs on Wednesday announced its decision to allow local lenders' OBUs to engage in non-delivery forwards (NDF) and non-delivery options (NDO) between the yuan and the US dollar.
The move, which takes immediate effect, allows Taiwanese companies operating in China to hedge their currency risks, the bureau said in a statement.
Forwards are agreements in which assets are traded at fixed prices for delivery later. Yuan forwards are "non-deliverable" because they are settled in dollars, not the yuan.
"We welcome the government's permission because it will help us offset possible yuan revaluation risks," said Tony Cheng (
The yuan has been fixed in a band around 8.2770 to the US dollar for the past eight years. But in view of China's huge trade surplus and increasing capital inflows in recent years, the Chinese currency has been under growing international pressure to abandon the peg or widen the band, which implies that it may have room to appreciate against the greenback in the future.
While many China-based Taiwanese companies currently rely on Chinese banks to deal with currency transactions, Cheng said they will turn to Taiwanese banks, "because Taiwan banks are generally more flexible than their Chinese counterparts."
Financial institutions that intend to undertake the business need to secure approval from the authorities in advance, the bureau said.
To date, ABN AMRO Bank and Citibank NA have sent applications for permission. Chinese-language newspapers have reported that several local banks are also interested in applying for the business, including Shanghai Commercial & Savings Bank Ltd (
As some Taiwanese companies have already engaged in yuan currency transactions with overseas banks, Cheng said he hopes the government will loosen restrictions on direct currency exchange between the yuan and the New Taiwan dollar.
The government still bans forex exchanges between the NT dollar and the yuan.
"We always need to go through multiple currency exchanges before we can get the yuan," Cheng said. "It's not only troublesome, but also causes interest losses amid forex exchanges."
One accounting specialist agreed with Cheng, saying direct forex exchange is needed as Taiwanese investment in China is increasing.
"The openness of direct forex exchanges will not only bring benefits to business people, it will also improve currency transaction by discouraging transactions in the black market," said Liang Tsai-tien (
Taiwanese companies' investment in China rose 31 percent to US$2 billion in the first half of the year from the same period last year, according to statistics of the Investment Commission.
The Eurovision Song Contest has seen a surge in punter interest at the bookmakers, becoming a major betting event, experts said ahead of last night’s giant glamfest in Basel. “Eurovision has quietly become one of the biggest betting events of the year,” said Tomi Huttunen, senior manager of the Online Computer Finland (OCS) betting and casino platform. Betting sites have long been used to gauge which way voters might be leaning ahead of the world’s biggest televised live music event. However, bookmakers highlight a huge increase in engagement in recent years — and this year in particular. “We’ve already passed 2023’s total activity and
Nvidia Corp CEO Jensen Huang (黃仁勳) today announced that his company has selected "Beitou Shilin" in Taipei for its new Taiwan office, called Nvidia Constellation, putting an end to months of speculation. Industry sources have said that the tech giant has been eyeing the Beitou Shilin Science Park as the site of its new overseas headquarters, and speculated that the new headquarters would be built on two plots of land designated as "T17" and "T18," which span 3.89 hectares in the park. "I think it's time for us to reveal one of the largest products we've ever built," Huang said near the
China yesterday announced anti-dumping duties as high as 74.9 percent on imports of polyoxymethylene (POM) copolymers, a type of engineering plastic, from Taiwan, the US, the EU and Japan. The Chinese Ministry of Commerce’s findings conclude a probe launched in May last year, shortly after the US sharply increased tariffs on Chinese electric vehicles, computer chips and other imports. POM copolymers can partially replace metals such as copper and zinc, and have various applications, including in auto parts, electronics and medical equipment, the Chinese ministry has said. In January, it said initial investigations had determined that dumping was taking place, and implemented preliminary
Intel Corp yesterday reinforced its determination to strengthen its partnerships with Taiwan’s ecosystem partners including original-electronic-manufacturing (OEM) companies such as Hon Hai Precision Industry Co (鴻海精密) and chipmaker United Microelectronics Corp (UMC, 聯電). “Tonight marks a new beginning. We renew our new partnership with Taiwan ecosystem,” Intel new chief executive officer Tan Lip-bu (陳立武) said at a dinner with representatives from the company’s local partners, celebrating the 40th anniversary of the US chip giant’s presence in Taiwan. Tan took the reins at Intel six weeks ago aiming to reform the chipmaker and revive its past glory. This is the first time Tan
RSS