The Taiwanese government is continuing talks with its Chinese counterpart to reach an agreement on currency swap, in order to strengthen the onshore liquidity of the yuan, Taiwan central bank governor Perng Fai-nan said Monday.
The policymaker, meanwhile, noted that the central bank is not trying to weaken the Taiwanese dollar intentionally. Once the currency-swap agreement is signed, yuan will be included as part of the foreign currency reserve.
In January, the two countries had signed a cross-strait currency clearing agreement, allowing onshore banks to accept yuan-denominated deposits and issue products related to the Chinese currency.
Fai-nan hoped that the the prospective value of the currency to be swapped would be greater than those currently existing between China-Hong Kong and China-South Korea.
The central bank chief also said the bank will take a decision on whether a change in the interest rate is needed or not after considering inflation pressures. Taiwan's inflation picked up to a bigger-than-expected 2.97 percent in February, on higher fuel and utility charges, from 1.13 percent in January.
The economy expanded at a significantly faster rate of 3.42 percent in the fourth quarter than 0.98 percent in the third quarter.
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