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.