SHANGHAI–The Bank of Taiwan said yesterday it had shipped NT$25 million (US$846,002) in cash to Shanghai, marking the first batch of New Taiwan dollars to be shipped directly across the Taiwan Strait without passing through a third location.
The cash went into the vaults of the bank’s Shanghai branch.
However, China’s State Administration of Foreign Exchange said that same day that a license for the bank’s Shanghai branch to conduct clearing services will not be approved until after the Lunar New Year.
Taiwan and China signed a memorandum of understanding in late August last year to set up a currency clearing mechanism. The two sides have been gearing up since then for the new business.
Taiwan’s Central Bank appointed Bank of Taiwan’s Shanghai branch Sept. 17 as the clearing bank with the authority to clear transactions in New Taiwan dollars in China.
The bank is authorized to supply up to NT$2 billion a year in China, according to the terms of the agreement signed between Taiwan’s central bank and the Bank of Taiwan.
It was reported, however, that due to China’s foreign currency regulations, the clearing service of the Bank of Taiwan’s Shanghai branch will be limited to the purchase and selling of New Taiwan dollars in the initial stage.