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China Names Clearing Bank for Taiwan Yuan Transactions

Bank of China Ltd.’s Taipei branch won the right to clear yuan transactions in Taiwan, paving the way for use of the mainland’s currency on the island that’s been ruled separately since a civil war six decades ago.

The bank branch will work to start yuan clearing within a month, Taiwan’s central bank governor Perng Huai-Nan told a meeting of lawmakers today. China’s central bank yesterday announced the appointment of Bank of China, which has been clearing yuan transactions in Hong Kong since 2003. Taiwan appointed Bank of Taiwan’s Shanghai branch to clear transactions in mainland China after the governments signed an agreement in August.