The central bank denied restricting sales of US dollars by currency traders in a bid to slow the appreciation of the New Taiwan dollar, which rose above NT$29.5 against the US greenback in intraday trading yesterday.
The bank on Sunday issued a brief statement dismissing media reports that it asked banks not to sell large amounts of US dollars in an attempt to slow the appreciation of the New Taiwan dollar.
“The bank has always respected bid-offer practices in the foreign exchange market,” it said yesterday.
Photo: Reuters / Tyrone Siu
However, a small number of banks put up sell orders involving large amounts and slow transactions, practices that affect other participants, it said.
The central bank has to take action and call for restraint among traders to facilitate the smooth flow of the local foreign exchange market, which is small and shallow, it said.
“The suggestion, intended as advice, should not be taken as sales restrictions,” it added.
Taiwan’s market has seen fast inflows of foreign capital in the second half of this year, as the nation’s interest rates stay in positive territory, while the central banks of other nations have cut policy rates to zero or less.
The NT dollar yesterday gained NT$0.02 to close at NT$29.486 against the US dollar, a two-and-a-half-year high, on turnover of US$1.14 billion, the bank said.
A stronger NT dollar could hurt Taiwanese exporters, reducing their competitiveness compared with foreign rivals or leading them to incur foreign exchange losses.
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