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Central bank governor calls for signing of cross-strait currency deal

2012/06/21 23:29:37

Taipei, June 21 (CNA) Taiwan Central Bank Governor Perng Fai-nan called for a currency clearance agreement between Taiwan and Chinaon Thursday.

"I hope that the Cross-Strait Currency Clearance Agreement can be signed as soon as possible," Perng said at a news conference, explaining the foundation for such an agreement was laid when Taiwanand China agreed to let each other's commercial banks set upbranch offices in their respective markets.

Taiwan's Financial Supervisory Commission's (FSC) approved Bank of China's plan to launch a Taipei branch on Friday, while China approved Taiwan's Mega International Commercial Bank to open its Suzhou City branch on Thursday.

Perng said while the two banks may have helped lay the foundation for signing the agreement, they would not necessarily become currency clearance banks in the future.

Moreover, Taiwan's FSC issued operation permits to Bank of China and Bank of Communications to set up branches in Taiwan on June 11, which will further assist the two sides in forming an agreement, Perng said.

Perng pointed out that Taiwan's central bank received currency exchange service applications from Bank of China on June 13, andissued a foreign exchange bank certificate to the bank on June 19.

China still has not liberalized its capital account, and the Chinese Yuan cannot be freely converted into a foreign currency, said Perng.

In addition, he noted, China's Taiwan Affairs Office spokeswoman Fan Liqing said at a news conference on June 13 that "establishing a cross-strait currency clearance mechanism is one of the main issues of financial cooperation between the two sides this year."

Relevant officials from both sides have already reached a basic consensus, and they hope to complete negotiations soon, Fan said.

(By Kao Chao-fen and C.J. Lin)