Taiwan’s central bank said it will enter the currency market when necessary to “maintain order” if there are “irregularities” in foreign-exchange trading.
The Taiwan dollar has been “relatively stable” compared with other regional currencies, Perng Fai-nan (彭淮南), governor of the Central Bank of the Republic of China (Taiwan), said in a report to be presented to parliament on March 12.
Taiwan’s currency rose 0.6 percent Tuesday, its biggest gain since Dec. 18, after a government report showed exports fell at a slower pace in February.
“The influence of irregularities such as hot money and speculative motives result in large moves that are not a reflection of economic fundamentals,” Perng said in the report. “Therefore, the central bank must enter the market at an appropriate time and make adjustments to maintain order.”
The central bank also reiterated it has adopted a looser monetary policy to stimulate the economy because of the global slowdown. The bank cut its key rate to a record-low 1.25 percent last month and may make further reductions after the economy shrank the most in more than 50 years. The bank has slashed the interest rate for seven times since last September in the midst of the downward economic situation.