The central bank strengthened its warning to local trading companies over their currency purchases as it seeks once again to tamp down speculation on foreign exchange markets and maintain the stability of the New Taiwan dollar.
Importers and exporters should only buy or sell the US dollar in a timely fashion based on their actual needs and not listen to exaggerated or false market predictions, the central bank said in a statement on Sunday.
The bank also urged analysts and the media not to comment on the local currency market in a speculative manner, or to make exchange-rate forecasts based on feelings.
Photo: CNA
The central bank also said it had found foreign investors buying NT dollars to invest in the local securities, but holding onto the currency instead. The authority said such moves might be intended to profit from the local exchange rate, which contravenes the central bank’s rules for foreign exchange settlements.
The statement represents more forceful wording to trading companies after the monetary authority’s earlier appeals for market calm appear to have gone unheeded. It is the fourth time the bank has issued a statement on the currency market since the NT dollar surged massively at the beginning of last month.
As of Friday, the NT dollar had strengthened for nine straight weeks, its longest streak since January 2020. The currency yesterday closed down 0.2 percent at NT$29.988 against the US dollar in Taipei trading.
The surge in the local currency is a concern for the export-dependent economy. It comes amid speculation that the central bank might let the NT dollar gain as it seeks a trade deal with the US. The US has long accused Taiwan of artificially maintaining a weakened currency to support its exporters.
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