The central bank is to launch special financial inspections on financial institutions, including local banks and foreign custodian banks, as part of efforts to curb speculative “hot money” inflows following a recent surge in the New Taiwan dollar, a central bank official said yesterday.
“The central bank will conduct on-site inspections to ensure that capital inflows are for investments in local stocks and not for currency speculation,” cable TV station USTV quoted Department of Foreign Exchange Director-General Eugene Tsai (蔡炯民) as saying at a central bank news conference in Taipei.
After foreign capital is remitted into Taiwan and converted into NT dollars, it should be used to purchase local stocks within one week at the latest and may not be kept on the sidelines for a long time, or it risks being flagged as currency speculation by the central bank, Tsai said, without specifying the maximum duration for which funds can remain idle in NT dollar-denominated accounts before drawing scrutiny.
Photo courtesy of the central bank
The central bank is not just concerned about the inflow of hot money, but is also monitoring whether NT dollar foreign exchange forward contracts by importers and exporters are being transacted based on genuine business needs, he added.
The NT dollar yesterday closed down NT$0.135 at NT$30.180 against the US dollar in Taipei trading. The local currency appreciated NT$1.065 against the greenback last month, before accelerating on Friday and Monday to post a gain of NT$1.872 over the two sessions, central bank data showed.
Market expectations for further appreciation of the NT dollar had largely subsided by yesterday. Tsai said.
Photo: CNA
“Judging from today’s market, we can already feel that the disorder has come to an end and the market has returned to a relatively rational situation,” he said.
Tsai made the remarks after the central bank released the nation’s foreign exchange reserve data for last month, which showed an increase of US$4.81 billion, or 0.83 percent, from the previous month to US$582.832 billion.
The figure marked a new record high for Taiwan’s foreign exchange reserves, reflecting the central bank’s purchase of US dollars last month to help maintain orderly NT dollar movements within a manageable range.
In addition, returns from the bank’s management of reserve assets and exchange rate movements of other reserve currencies against the US dollar also contributed to the rise in foreign exchange reserves, the central bank said.
As of the end of last month, the market value of securities investments and deposits held by foreign portfolio investors totaled US$721.9 billion, equivalent to 124 percent of the nation’s foreign exchange reserves, compared with US$708.9 billion, or 123 percent, at the end of the previous month, the central bank said.
SEMICONDUCTOR SERVICES: A company executive said that Taiwanese firms must think about how to participate in global supply chains and lift their competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it expects to launch its first multifunctional service center in Pingtung County in the middle of 2027, in a bid to foster a resilient high-tech facility construction ecosystem. TSMC broached the idea of creating a center two or three years ago when it started building new manufacturing capacity in the US and Japan, the company said. The center, dubbed an “ecosystem park,” would assist local manufacturing facility construction partners to upgrade their capabilities and secure more deals from other global chipmakers such as Intel Corp, Micron Technology Inc and Infineon Technologies AG, TSMC said. It
NO BREAKTHROUGH? More substantial ‘deliverables,’ such as tariff reductions, would likely be saved for a meeting between Trump and Xi later this year, a trade expert said China launched two probes targeting the US semiconductor sector on Saturday ahead of talks between the two nations in Spain this week on trade, national security and the ownership of social media platform TikTok. China’s Ministry of Commerce announced an anti-dumping investigation into certain analog integrated circuits (ICs) imported from the US. The investigation is to target some commodity interface ICs and gate driver ICs, which are commonly made by US companies such as Texas Instruments Inc and ON Semiconductor Corp. The ministry also announced an anti-discrimination probe into US measures against China’s chip sector. US measures such as export curbs and tariffs
The US on Friday penalized two Chinese firms that acquired US chipmaking equipment for China’s top chipmaker, Semiconductor Manufacturing International Corp (SMIC, 中芯國際), including them among 32 entities that were added to the US Department of Commerce’s restricted trade list, a US government posting showed. Twenty-three of the 32 are in China. GMC Semiconductor Technology (Wuxi) Co (吉姆西半導體科技) and Jicun Semiconductor Technology (Shanghai) Co (吉存半導體科技) were placed on the list, formally known as the Entity List, for acquiring equipment for SMIC Northern Integrated Circuit Manufacturing (Beijing) Corp (中芯北方積體電路) and Semiconductor Manufacturing International (Beijing) Corp (中芯北京), the US Federal Register posting said. The
India’s ban of online money-based games could drive addicts to unregulated apps and offshore platforms that pose new financial and social risks, fantasy-sports gaming experts say. Indian Prime Minister Narendra Modi’s government banned real-money online games late last month, citing financial losses and addiction, leading to a shutdown of many apps offering paid fantasy cricket, rummy and poker games. “Many will move to offshore platforms, because of the addictive nature — they will find alternate means to get that dopamine hit,” said Viren Hemrajani, a Mumbai-based fantasy cricket analyst. “It [also] leads to fraud and scams, because everything is now
RSS