Taiwan Local Banks to Start Interbank Dollar Clearing

Taiwan will set up a clearing system with local banks converting the U.S. dollars held by lenders on the island to boost currency liquidity, the central bank said in an e-mailed statement.

The new measure will be restricted to currency conversions for trade-related purposes, and will “cut foreign-exchange risks” borne by domestic companies, the monetary authority said.

“The new move will make currency clearings faster for banks,” said Hao-Yun Juan, a currency trader at King’s Town Bank in Taipei. “I think the central bank will expand to non trade-related settlements.”

Taipei-based Mega International Commercial Bank was authorized to conduct the business starting December.

To contact the reporter on this story: Yu-Huay Sun in Taipei at ysun7@bloomberg.net

To contact the editor responsible for this story: Janet Ong at jong3@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.