MAC may ease yuan exchange rules

This article was published by the Taiwan Headlines on April 26, 2006. It reports that the government in Taiwan would consider allowing some locations to facilitate the exchange of currency between the Chinese yuan and the New Taiwan dollar. Under current regulations, Taiwan and China would have to sign an agreement before their financial institutions could be allowed to handle yuan exchanges.

In order to prepare for more Chinese visitors to Taiwan, the Mainland Affairs Council will join forces with other government agencies to study the possibility to operate the currency exchange without violating the law. Further details would require more investigation, such as the procedure, the amount, the exchange method and whether the Chinese visitors could convert the New Taiwan dollar back to the Chinese yuan when they return to China.

Only stores in Taiwan's outlying islands of Kinmen and Matsu are allowed to convert the Chinese yuan to local currency. The government will confiscate the Chinese currency if establishments in other parts of Taiwan are found accepting the yuan.

According to the Mainland Affairs Council, the government in Taiwan is striving to complete the negotiations on relevant regulations in order to open up to Chinese visitors within six months. The government may even unilaterally announce the opening measures if all ancillary measures are ready. At present, only Chinese nationals who live abroad and those who travel to Taiwan via a third place are permitted to visit Taiwan for sightseeing purposes.

Official statistics show that since October 2005, when the government in Taiwan began to allow financial institutions in Kinmen and Matsu to handle yuan-NT exchange, banks have sold nearly 90 million yuan and bought less than 10 million yuan from the public.