The Central Bank of China
PRESS RELEASE Release Date: November 9 , 2004



Important Measures in October 2004

In line with the policy of promoting the liberalization, internationalization, and development of the foreign exchange market, the Central Bank of China (CBC) announced the following measures in October 2004:

1. To improve banking services offered to overseas Taiwanese and enhance efficiency, CBC announced on Oct. 13 that DBU may act on behalf of OBU of the same bank in foreign currency deposit and foreign exchange inward remittance operations.

2. In order to deepen the Taipei Foreign Exchange Market and create a sound and secure financial infrastructure, authorized banks can apply to CBC for offering discretionary margin trading services form 20th Oct. 2004 onward.

3. The weather can have a significant influence over the domestic and international economy. To provide the possibility of hedging against the impact of weather fluctuations, authorized banks can apply for permission to trade weather options from 27th Oct. 2004 onward.

4. Approved the following Authorized Banks to operate new foreign exchange derivatives business:

(1) International Bank of Taipei: Foreign Currency Interest Rate Swaptions composed of FCY Interest Rate Options and FCY Interest Rate Swaps.

(2) DBS Bank, Ltd., Taipei Branch: FCY Structured Product composed of NTD Interest Rate Swaps, FCY Interest Rate Swaps, FCY Interest Rate Options and FCY FRAs.

(3) ABN AMRO Bank N.V., Taipei Branch: Weather Options traded against Taiwan or global weather index with local or overseas enterprises as counter parties.

5. Authorized 5 branches of 2 domestic banks to operate foreign exchange business. In addition, 11 non-authorized foreign exchange banks were approved to sell/buy foreign currency banknotes and traveler's checks. As of the end of October 2004, there were 1,098 authorized foreign exchange banks, including 1,032 domestic banks and 66 foreign banks.