The central bank yesterday gave foreign investors a week to buy stocks with the money they have deposited in Taiwan or remove it.
The rare move is part of a crackdown on speculators who authorities claim are bringing money into Taiwan, saying they will invest in the stock market, but instead using the funds to bet on the local currency.
The bank says this speculation is driving up the value of the New Taiwan dollar and hurting the country’s exporters abroad as they struggle to recover from the global downturn.
“We’ve told the investors they must spend the money the way they had previously indicated when they applied with authorities to remit the money into Taiwan,” a bank official said. “They’ve got one week.”
Lu Ting-chieh (盧廷劼), a Financial Supervisory Commission spokesman, declined to specify penalties for foreign investors who violate the measures.
“Like any other country in the world, whenever the central bank makes clear its demands, I believe few investors will dare to challenge them,” he said.
In Taipei’s foreign exchange market, the NT dollar has appreciated by about 1.1 percent against the US dollar over the past month.
The NT dollar climbed 0.1 percent to NT$31.860 as of 4pm yesterday, Taipei Forex Inc said. The benchmark TAIEX index added 0.04 percent to a 19-month high of 8,211.40 yesterday.
Statistics released by the central bank showed foreign investors deposited NT$49.03 billion (US$1.55 billion) in the five days to Monday, but only NT$17.77 billion has been invested in the local stock market.
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