The Minister of Finance will scrap its 3.5 percent downward volatility limit on the TAIEX, and revert to the 7 percent limit at the start of trade today.
"The daily downward limit on share prices will be changed back to 7 percent, effective Monday," Minister of Finance Yen Chin-chang (
The move follows criticism that stock trading had contracted following a decision to halve the lower limit.
Yen said that the finance ministry decided to revert back to the normal limit because "the impact of both the US terrorist attacks and the recent typhoon on the stock market was not significant."
Yen met with officials from the Securities and Futures Commission before making the decision yesterday.
The finance ministry said last week that it was halving the daily limit on share price declines to 3.5 percent. The move was to be in effect from Sept. 19 to 28 in an effort to stave off any negative effects on stocks in anticipation of US military action against terrorist strongholds in the Middle East.
Following the implementation of emergency measures, turnover quickly shrank to NT$26.1 billion (US$755 million) on Wednesday and fell further to NT$13 billion (US$376 million) on Friday, down from NT$47.75 billion the previous Friday.
Executives from securities companies said that after narrowing the lower limit on share movement, liquidity in the market was seriously affected, with hundreds of shares failing to find buyers.
"In order to maintain market liquidity and respect the market mechanism, the ministry has decided to cancel the measure ahead of schedule," Yen said.
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