SHANGHAI - New Taiwan dollar (TWD) banknotes became available for over-the-counter exchange at the Shanghai branch of the Bank of Taiwan on Tuesday.

The branch, the clearing bank for Taiwan dollar transactions on the Chinese mainland, formally commenced business the same day.

The move came after an initial batch of currency notes worth NT$25 million ($837,143) were shipped directly to the branch on Feb 6.

The mainland and Taiwan signed a currency clearing memorandum in August 2012, agreeing to form a cross-Strait currency clearing mechanism.

Bank of Taiwan's Shanghai branch has been designated as the Taiwan dollar clearing bank on the mainland, while the Bank of China's Taipei branch is the clearing bank for yuan transactions on the island.