The central bank yesterday said that Taiwan did not carry out one-sided currency intervention as the US has claimed.
The nation’s monetary policymaker released a statement after the US Department of the Treasury submitted a report on foreign exchange policies of major trading partners to the US Congress on Friday, which put Taiwan, China, South Korea, Japan and Germany on a watch list for an “enhanced analysis” of the nations’ practices.
The US Treasury has listed three criteria to monitor unfair trade advantages against the US, of which Taiwan met two, according to the report.
The report said that Taiwan “engaged in persistent net foreign currency purchases through most of last year.”
“In light of Taiwan’s large current account surplus, such interventions are concerning,” the report said.
The report said that as of the end of last year, Taiwan has spent 2.4 percent of its GDP on net foreign exchange purchases, surpassing the US Treasury’s criterion of 2 percent.
The figure “is an estimate” of the US Treasury only, the central bank said in its statement.
The report also said that “[Taiwanese] authorities should limit foreign exchange interventions to the exceptional circumstances of disorderly market conditions, as well as increase the transparency of reserve holdings and foreign exchange market intervention.”
The US Treasury also said that Taiwan has a material current account surplus of 14.6 percent of GDP, exceeding 3 percent of its criterion.
Taiwan’s bilateral goods trade surplus with the US stood at US$14.9 billion last year, falling short of the US Treasury’s threshold, according to the report.
However, the US Treasury’s figure greatly exceeded last year’s US$5.3 billion trade surplus based on Ministry of Finance data, the central bank said.
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