BEIJING - The Chinese mainland and Taiwan Friday signed a memorandum on currency clearing, paving the way for a cross-Straits currency clearing mechanism, said a mainland spokesman here.

This is another important step for cross-Straits financial cooperation, said Yang Yi, spokesman with the State Council Taiwan Affairs Office in a statement to Xinhua.

A cross-Straits currency clearing mechanism will lower the cost of currency exchange and the risk of exchange rate fluctuation for business and people on both sides, Yang said.

It will facilitate cross-Straits investment and trade and expand economic cooperation, he said.

The move is a response to the calls and expectations of people on both sides and is mutually beneficial and of great significance for economic development on both sides, he said.

"We are hoping currency regulators on both sides will speed up follow-up preparation work and start cross-Straits currency clearing operations as early as possible," he said.

According to a cross-Straits financial cooperation agreement in 2009, the currency clearing service is only applied to cash exchanges.

Currently, banks from both sides can choose clearing banks in Hong Kong or Macao to carry out currency settlements and liquidations. This takes a longer time and is more trouble, especially concerning the shipping of notes.

Also, lenders on the Chinese mainland and Taiwan can rely on correspondence banks located elsewhere to provide services for a settlement and clearance of trade and investment across the Taiwan Strait.

Financial institutions from both sides have long called for a direct clearing system between banks across the Strait and expanding the services on remittance.