The government will not intervene in the securities and foreign exchange markets with the national stabilization fund unless non-economic reasons cause disorder in the capital and financial markets and sabotage national security, Cabinet officials said yesterday.
"So far we haven't seen any signs of disorder in the markets, but we'll keep a close eye on trading tomorrow," Minister of Finance Lin Chuan (林全) told a press conference yesterday.
The conference was held after an emergency closed-door meeting presided over by Vice Premier Lin Hsin-i (林信義) to discuss measures the Cabinet plans to take to counter the possible impact the election controversy might have on the financial markets.
If the government eventually decides to intervene, Lin said, it has about NT$100 billion of national stabilization fund capital at its disposal.
Lin, however, said the government would respect the free market mechanism while at the same time maintaining market stability.
Lin also dismissed speculation that foreign investors would start to pull out of the markets in the wake of the election controversy.
"So far, foreign investors have shown strong interest in local markets and continue to bring capital as the local economy has shown conspicuous signs of recovery," he said. "I'd also like to point out here that our efforts to further open up the futures and spot markets did not stop because of the election and will not stop now."
On the forex front, central bank chairman Perng Fai-nan (彭淮南) said that the bank will fully respect the free-market mechanism and will not intervene in the exchange market unless irrational or special incidents occur to cause abnormally large fluctuations in the exchange rate.
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