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China allows banks to start Taiwan dollar business
April 9, 2013 / 12:05 PM / 5 years ago

China allows banks to start Taiwan dollar business

BEIJING, April 9 (Reuters) - China will allow its banks to directly buy or sell Taiwan dollars for clients, the country’s foreign exchange regulator said on Tuesday, in the latest sign of growing financial ties between the two.

The new rule also followed a recent deal to start direct trade between the Chinese yuan and the Australian dollar, reflecting Beijing’s ambition to increase the global use of its currency.[ID:nB9N0BW02Q]

“The rules are issued to regulate domestic banks’ business regarding Taiwan dollar conversion, which will help strengthen economic and trade ties as well as facilitate personnel exchanges across the strait,” the State Administration of Foreign Exchange (SAFE) said in a statement dated March 18 but announced on Tuesday.

It added that those banks wanting to start Taiwan dollar business must file a record beforehand to the local branch of SAFE. It did not say whether there was any ceiling on the amounts that could be bought or sold.

Financial ties between Taiwan and the mainland have been gathering pace in recent months, catching up with the close cooperation in manufacturing and other areas between the political rivals.

In late March, Bank of Taiwan [BKTW.UL] said its Shanghai branch will start Taiwan dollar clearing services in China, while Bank of China’s (601988.SS) (3988.HK) Taipei branch is the clearing bank for yuan transactions in Taiwan.[ID:nT8N0BW01E]

Thirteen Chinese banks and nine Taiwanese banks have signed up as joining members in the clearing services.

(Reporting by Aileen Wang and Jonathan Standing)

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