Cross Strait settlements to improve

Selection of Renminbi settlement bank proceeding cautiously.

China is close to choosing a bank for Renminbi settlements in Taiwan. Officials in both nations expect that improved monetary cooperation will become an important part of financial cooperation across the Taiwan Strait.

Wang Huaqing, Commissioner of Discipline Inspection of the People’s Bank of China and vice chairman of the China Society for Finance and Banking, said selecting a Renminbi clearing bank in Taiwan is still in progress in accordance with relevant procedures and requirements.

He also said building a cross-Strait currency settlement mechanism will take time and take banks' willingness into consideration.

"The cross-border flows of Renminbi and NTDs will benefit enterprises and banking sectors from both sides of the Taiwan Strait, as it lowers the cost of currency exchange and the risk of exchange rate fluctuation for businesses on both sides," Wang said.

A memorandum on cross-Strait currency settlement signed in August allows the two sides to establish a currency clearing system by each designating a bank to carry out currency settlements and liquidations for the other side.

Taiwan has already chosen the Shanghai branch of Bank of Taiwan as the clearing bank for New Taiwan Dollars (NTDs) in the Chinese mainland.