Monetary Management
Foreign Exchange Management
Clearing and Settlement Services
Currency Issuance
Treasury Agency Functions
Bank Examination
Statistics and Research
Participation in International Organizations

According to the Central Bank of China Act, the Bank's operational objectives include promoting financial stability, ensuring sound banking operations, maintaining the stable internal and external value of the currency and, within the scope of the above three objectives, fostering economic development. In order to achieve its operational objectives, the Central Bank of China conducts the following operations:

Monetary Management
The Bank uses various policy instruments, including open market operations, discounts and temporary accommodations, required reserve ratios, re-deposits of financial institutions etc., to regulate financial conditions and to achieve monetary policy objectives.

Foreign Exchange Management
To date, residents can freely hold and use foreign exchange export proceeds and also make foreign exchange import payments without restrictions. Only certain regulations imposed on remittances related to capital account transactions are retained for the purpose of financial stability.

The NT dollar exchange rate is determined by market forces, which is in line with the policy of exchange rate liberalization. Only when the foreign exchange market is disrupted by seasonal or irregular factors will the Bank step in.

Clearing and Settlement Services
The Bank is the major operator of the payments system in Taiwan, providing services for payments among banks. Payments, including those associated with central bank accommodation, interbank loans, bill and bond transactions, are settled via the Central Bank of China Interbank Funds Transfer System (CIFS). The Bank is also responsible for promoting the efficiency and security of the payments system, as well as supervising clearing houses regarding check clearing and settlements among the banks involved.

Currency Issuance
In July 1961, the Bank resumed its operations in Taiwan and regained its right to issue currency. The Bank is responsible for designing, planning, producing bank notes and coins, and destroying old notes which are no longer fit to use. The Bank of Taiwan, a state owned commercial bank, is authorized to distribute notes and coins and sorts out returned notes.

Treasury Agency Functions
As the fiscal agency, the Bank handles receipts and disbursements of funds and properties for the central government and its agencies. The Bank also handles the issuance, redemption and interest payment of central government securities. Settlements of funds and securities arising from the above operations are facilitated by the CBC-Wire, which is the main system integrating the CIFS and the Central Government Securities Settlement System.

With the introduction of the book-entry central government bond system in September 1997, the issuance, transfer, redemption and interest payment of the bonds are in the form of accounting entries on computer records. Since then, the bonds have no longer been issued tangibly. The book-entry Treasury bills system was also introduced in October, 2001.

Bank Examination
Based on the Central Bank of China Act , the Bank also has the responsibility to examine the operations of all financial institutions under the operational objectives of promoting financial stability and guiding sound banking operations.

With regard to financial institution examination, emphasis is placed on the following: understanding the consistency of their operations with respect to monetary policy, assessing their compliance with relevant regulations, reviewing their operational procedures, evaluating their systems of internal controls and the efficiency of their operations, and reviewing current regulations.

Statistics and Research
The Bank compiles data on financial statistics, flow of funds, and balance of payments, and publishes these statistics in the Financial Statistics Monthly, Flow of Funds Annual, and Balance of Payments Quarterly. The Bank's Annual Report and Quarterly Review are also published. The Bank's publications are sent to domestic and international institutions.

The Bank's research covers a wide range of economic and financial subjects, such as financial market conditions, monetary aggregates reserve money, movements of interest rates and NT dollar exchange rates, balance of payments, flow of funds, as well as production activities, investments, and prices. The Bank also conducts studies on economic and financial conditions of major countries as well as impacts arising from innovations in global financial markets.

Participation in International Organizations
The Republic of China is currently a full member of the Asian Development Bank (ADB), the Central American Bank for Economic Integration (CABEI), and the Conference of Governors of South East Asian Central Banks (SEACEN). The Bank attends the annual meetings, provides training courses, and hosts conferences so as to strengthen financial cooperation and relations with other member countries. In addition, the Bank also plays an active role in the Inter-American Development Bank (IDB), the European Bank for Reconstruction and Development (EBRD), and the Bank for International Settlements (BIS), among other international financial organizations.