The central bank has allowed Deutsche Bank to resume trading New Taiwan dollar deliverable and non-deliverable forwards, one year after it suspended the business as part of a crackdown on speculation in the local currency.
The central bank in February last year punished four foreign banks for helping grain merchants speculate in NT dollar deliverable forwards in a breach of foreign exchange regulations.
It revoked Deutsche Bank’s license to trade NT dollar deliverable and non-deliverable forwards, as well as suspending the lender’s ability to trade foreign exchange derivatives for two years.
Photo: CNA
The central bank also banned the Taipei branches of ING Bank NV and Australia & New Zealand Banking Group (ANZ) from trading NT dollar deliverable forwards and non-deliverable forwards for nine months.
Citibank Taiwan Ltd (花旗台灣) was suspended for two months.
The central bank said Deutsche Bank had shown improvement on compliance issues.
It is the only German bank in Taiwan and has served many local and foreign customers over the decades, the central bank said, adding that the lifting of the penalty would help Deutsche Bank to protect and advance the interests of its customers and employees.
The monetary policymaker has shown no tolerance for NT dollar speculation, as such practices destabilize the foreign exchange market and hurt Taiwan’s export-reliant economy.
The NT dollar picked up about 2.5 percent last year, driven by strong global demand for Taiwan-made electronic components used in smartphones, PCs, wearable devices, TVs, high-performance computing devices, vehicles and Internet of Things applications.
In July last year, the central bank lifted the trading curbs on ING and ANZ after their involvement in the same case.
The central bank has repeatedly intervened in the foreign exchange market, but has shown more restraint after the US puts Taiwan on its currency speculation watch list.
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