Taiwan adds Chinese yuan to forex reserves

AFP FILE PHOTO

TAIPEI — Taiwan’s central bank has added the Chinese yuan to the island’s foreign exchange reserves portfolio, a top official said Wednesday, reflecting closer economic ties.

“Currently the central banks in 11 countries and two international currency organizations hold Chinese yuan … (Taiwan’s) central bank has already held Chinese yuan in foreign exchange reserves,” the central bank’s governor Perng Fai-nan told lawmakers without disclosing the amount.

At the end of August Taiwan’s forex reserves hit a record high of $409 billion, up by $270 million from the end of July due to the central bank’s investment returns.

Taiwanese banks in February started allowing customers to open Chinese yuan accounts and remit funds to the mainland, in an attempt to reduce the risk of exchange rate fluctuation and the cost of currency exchanges.

Trade between Taiwan and the mainland was worth $168.96 billion in 2012, according to Chinese figures.

The two sides have signed a number of financial memorandums of understanding in recent years to improve cooperation in banking, insurance and securities.

Ties have improved markedly since Beijing-friendly Taiwanese President Ma Ying-jeou assumed power in 2008.

However, China still considers Taiwan part of its territory awaiting reunification, even though the two sides have been governed separately since they split in 1949 after a civil war.