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Taiwan central bank fighting back against currency speculation

A file photo of central bank’s Foreign Exchange Bureau Director Lin Sun-yuan. Lin said that the central bank hopes that inbound remittances will be us...

A file photo of central bank’s Foreign Exchange Bureau Director Lin Sun-yuan. Lin said that the central bank hopes that inbound remittances will be us...

Taiwan’s central bank will do its best to prevent the local currency from appreciating substantially in the near future, as Taiwan's economy has not yet showed signs of recovering from a lingering recession, market analysts predicted Monday.

Money dealers at major local banks made the forecast after the Taiwan dollar's exchange rate against the U.S. greenback fluctuated dramatically Monday, with the gap between the day’s high and low exceeding NT$0.5 during the trading session.

Without the central bank's intervention, currency dealers said, the Taiwan currency would have closed much higher Monday because of an influx of hot money.

By the end of Monday’s trading session, the local currency had inched up NT$0.041 to close at NT$33.192 against the greenback.

The local currency has risen against the greenback for seven consecutive trading days, with the steepest daily increase of NT$0.425 recorded on April 30, the day after the government announced it would ease restrictions on Chinese qualified domestic institutional investors (QDII) to invest in Taiwan.

On Monday, daily turnover on the Taipei Foreign Exchange amounted to US$2.961 billion, the 10th largest single-day trading volume in history.

Market analysts said the central bank’s intervention Monday clearly reflects its unwillingness to see the value of Taiwan's currency be influenced by hot money or speculation.

Lin Sun-yuan (林孫源), director of the central bank’s Foreign Exchange Bureau, said that the central bank hopes that inbound remittances will be used to purchase shares on the local bourse instead of to speculate in Taiwan's currency.



Updated : 2021-04-17 07:48 GMT+08:00