The Central Bank of China
PRESS RELEASE Release Date: June 2, 2004




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Important Measures in May 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 May 2004:

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

(1) Bank Sinopac: Foreign Currency Structured Products composed of NTD Deposits, NTD Interest Rate Swaps and FCY Interest Rate Derivatives.

(2) Chiao Tung Bank: FCY Equity Options, FCY Equity Swaps, FCY FRAs, FCY Interest Rate Swaptions and Foreign Currency Structured Products composed of NTD or FCY Deposits and FCY Interest Rate Derivatives(including FCY Interest Rate Swaps, FCY Interest Rate Options and FCY Interest Rate Swaptions).

(3) The Farmers Bank of China: Foreign Currency Options.

(4) Fuh Hwa Commercial Bank: Foreign Currency Structured Products composed of NTD Deposits, NTD Interest Rate Swaps and FCY Interest Rate Derivatives.

(5) Ta Chong Bank: FCY FRAs, Foreign Currency Structured Products composed of NTD Deposits, NTD Interest Rate Swaps and FCY Interest Rate Derivatives. FCY Equity Options, Foreign Currency Structured Products composed of NTD or FCY Deposits and FCY Equity Options.

(6) Taipei Business Bank: Foreign Currency Structured Products composed of NTD Deposits, Foreign Currency Options and/or FCY Interest Rate Options.

(7) International Commercial Bank of China: Foreign Currency Structured Products composed of NTD Deposits and any one of Foreign Currency Options, FCY Interest Rate Options, FCY Commodity Options and FCY Equity Options.

(8) Far Eastern International Bank: FCY Interest Rate Derivatives, Foreign Currency Structured Products composed of FCY Deposits and FCY Interest Rate Derivatives, Foreign Currency Structured Products composed of NTD or FCY Deposits, NTD and FCY Interest Rate Derivatives.

(9) The Hongkong and Shanghai Banking Corp., Taipei Branch: Foreign Currency Structured Products composed of NTD or FCY Deposits and FCY Interest Rate Derivatives.

(10) Deutsche Bank AG: NTD Quanto Swaps (Composed of NTD Interest Rate Swaps and any combination of FCY Interest Rate Swaps, FCY Interest Rate Options and FCY Interest rate Swaptions) with FCY notional principal and interest linked to NTD Interest Rate.

2 Authorized 2 branches of 2 domestic banks and 1 foreign bank to operate foreign exchange business. As of the end of May 2004, there were 1,083 authorized foreign exchange banks, including 1,015 domestic banks and