TAIWAN will launch yuan forex futures July 20, four sources with direct knowledge of the matter said yesterday, in the island’s latest efforts to become a major offshore yuan market.

    Taiwan will join Chicago, Hong Kong, Singapore and Brazil, among others, in introducing such futures contracts, said the sources, who declined to be identified.

    Taiwan’s trade ties with the mainland have improved to their best levels in more than six decades since Taiwan leader Ma Ying-jeou took office in 2008. The mainland is Taiwan’s biggest export market and both sides are close trading partners, prompting a surge in demand for the yuan.

    The Taipei branches of Bank of China and China Construction Bank, as well as Taiwan’s Chang Hwa Bank, Fubon Bank, CTBC Bank, Bank of Sinopac and KGI Bank will be the market makers, said the sources.

    “These banks have been very aggressive, especially the mainland banks,” said one of the sources.

    Taiwan has initially agreed to allow brokers to help their clients with settlements if margin calls occur, said another source.

    The yuan futures contract is expected to attract retail investors and companies with business on the mainland. (SD-Agencies)