TAIPEI — Taiwan’s central bank governor Perng Fai-nan said Monday that the bank is working to sign a currency-swap agreement with China as soon as possible and will strive to keep the currency swap line at not less than 300 billion yuan (US$48.27 billion).
Perng expressed hope that the agreement can be signed by the end of this year, adding that the framework is already in place.
China has a currency swap agreement with Singapore at 360 billion yuan, as well as agreements with Hong Kong and South Korea of 400 billion yuan and 300 billion yuan, respectively. Taiwan hopes that the size of its currency swap agreement can be not less than the South Korean level.
Perng made the remarks during a Legislative Yuan question-and-answer session.
The mainland has signed currency-swap agreements with 18 countries and regions with currency swap volume totaling 1.816 trillion yuan, Perng said.
Asked about the benefits of signing a cross-strait currency-swap agreement, Perng noted that such an agreement could provide adequate liquidity in each other’s currency. Most important, however, is the signing of a memorandum of understanding on cross-strait currency settlement, he added.
Asked when Taiwan will include China’s currency in its foreign reserves, Perng said Taiwan’s central bank will take into consideration the extent to which a country’s currency can be used internationally and its liquidity while managing its foreign reserves. Regarding the sharp decline of the Japanese yen over more than six months, Perng said importers should lower their prices of imports from Japan since the Japanese yen has dropped more than 15 percent against the U.S. dollar since November 2012.
Perng also said the central bank has no plans to phase out measures it has imposed to cool down the overheated property market.