OREANDA-NEWS. September 14, 2012. The monetary authorities on both sides of the Taiwan Straits signed a Memorandum on Currency Clearing Cooperation Across the Straits. The two parties agreed to estalish a across-Straits currency clearing mechanism based on principles and cooperation framework as defined in this Memorandu, reported the press-centre of PBC. 

According to the Memorandum, each party will select a currency clearing institution to provide clearing and settlement service in its own currency. The selected institutions are authorised to transport and deliver cash according to related laws and regulations. The two parties have agreed for the two currencies to be used for payment and settlement in trade in goods and services, investments, and etc. The financial instituions may open accounts in either currency for settlements and other authorised bussiness. Both parties, committed to the sound operation of the clearing mechanism, have put in place a supervisory cooperation mechanism, which consists of qualification requirements for currency clearing instituions, information exchange, confidentiality requirements, business examination, risk management, communication mechanism, and etc.

The spokesman of PBC said that the Memorandum is a follow-up measure in the implementation of the Agreement on Financial Cooperaion across the Straits and lays the foundation for the two parties to set up a currency clearing system. It signals a new era of monetary cooperation and marks a milestone in financial cooperation across the Taiwan Straits as it is expected to help facilitate trade and investment and deepen the economic ties across the Straits.