Taiwan Central Bank to include RMB in its foreign reserves

TAIPEI - The Central Bank of Taiwan has announced plans to hold the RMB in its foreign exchange reserves. The move follows similar announcements in the past two years by other central banks, including those of Australia, Chile, Japan, and Korea. Taiwan has not yet given details of the timing of amounts it plans to hold (Taiwan’s total reserves amounted to a US$409 billion as of August 2013).

Perng Fai-nan, Governor of the Central Bank said the move was  a reflection of China's economic strength. He also pointed to US$160 billion in annual trade and US$500 billion in annual fund flows between Taiwan and China as an indicator of the closeness of bilateral business tie
Demand for the Chinese currency in Taiwan has been on the rise since Taiwan lifted its ban on yuan-denominated transactions in domestic banking units at locally operating banks in August. Perng said negotiations between Taiwan and China on a currency swap agreement are proceeding smoothly (ATI).