The Central Bank of China
PRESS RELEASE Release Date: August 6, 2004



Important Measures in July 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 July 2004:

1. On July 20, CBC notified banking enterprises engaged in buying and selling foreign currency notes that they should bear the responsibility to exchange foreign currency notes in accordance with the listing prices on the display board, and must have qualified staff who can identify counterfeit foreign currency notes. Once discovered, counterfeit foreign currency notes are to be disposed off according to "Regulations Governing the Handling of Counterfeit Foreign Currency Notes"

2.In order to enhance the ability of identifying counterfeit foreign currency notes, CBC asked Hongkong & Shanghai Commercial Bank, Taipei Branch to dispatch experts form H.K. to held two seminars in CBC on July 29th and 30th.

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

(1) Bank of Panhsin: Structured Products composed of NTD Time Deposits and FCY Options.

(2) KBC Bank N.V. , Taipei Branch: FCY Structured Products composed of NTD Interest Rate Swaps, NTD Interest Rate Options, FCY Interest Rate Swaps and FCY Interest Rate Options.

(3) ABN AMRO Bank, Panchiao Branch commences the business of Foreign Currency Trust Funds Earmarked for Investment in Foreign Securities.

4. Authorized 4 branches of Chinatrust Commercial Bank to operate foreign exchange business. As of the end of July 2004, there were 1,090 authorized foreign exchange banks, including 1,024 domestic banks and 66 foreign banks.