Taiwan should establish its own exchange rate and interest rate fixing mechanisms for the renminbi, the island’s central bank deputy governor Yang Ching-long said on Friday. Domestic and foreign banks are welcome to join in the development of the so-called CNT exchange rate and CNT Taibor, which could become a benchmark for yuan-denominated financial contracts offered on the island, Yang told a financial forum in Taipei. He said differences in renminbi clearing mechanisms, pool composition, credit ratings and investor risk preferences reduce the relevance for Taiwan to adopt CNH fixings from Hong Kong, according to a central bank statement. Also, the central bank hopes to sign a currency swap agreement with its mainland counterpart “as soon as possible” to build a safety net in Taiwan for renminbi liquidity, he said.
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