Citibank ready for renminbi trading in Taiwan

Citibank Taiwan can immediately extend its renminbi-based products and services once Taiwan and China work out currency clearing and settlement rules.

Citibank Taiwan chairman Victor Kuan said his bank stands ready to tap into renminbi-linked business. Taiwan is seriously intent on becoming a second offshore renminbi or yuan business center after Hong Kong as the Chinese currency gains increasing weight in global trade.

The central bank and the Financial Supervisory Commission are pulling out all the stops to build the nation into

“Taiwan has great potential to become another offshore yuan hub aided by capital and trade settlement needs,” Kuan said. “The development may be evident in three to five years.”

Regulators should learn from Hong Kong in dealing with regulatory easing so whatever customers can do with renminbi there such as renminbi-denominated deposits, savings, remittances and bonds can also be done in Taiwan, Kuan said.

Cross-strait trade totals more than US$3.41 billion a year. Currently, renminbi and New Taiwan dollar settlements are conducted through Hong Kong, where the Bank of China (Hong Kong) offers renminbi cash-settlement services to the Hong Kong branches of state-run Bank of Taiwan and Mega International Commercial Bank.

China, however, has not appointed a clearing intermediary after signing a memorandum of understanding over a currency clearing agreement this August. The Bank of Taiwan’s Shanghai branch will be in charge of New Taiwan dollar supply on the Taiwan side. The MOU is to take effect within 60 days.