The central bank bought US$7.69 billion more US dollars than it sold last year on the local foreign exchange market to “smooth currency volatility,” it said in a report released on Friday.
In the report submitted to the Legislative Yuan ahead of a legislative hearing scheduled for today, the central bank said the net purchases were equivalent to only 0.8 percent of Taiwan’s GDP for the year.
The central bank said its intervention level remained in line with guidance set by the US Department of the Treasury when it evaluates trading partners for possible currency manipulation.
Photo: CNA
The US Department of the Treasury places economies on its currency manipulation list if they meet three criteria during an evaluation period: a trade surplus with the US exceeding US$15 billion, a current account surplus above 3 percent of GDP and persistent net foreign currency purchases exceeding 2 percent of GDP in at least eight of 12 months.
Taiwan in January remained on the US Treasury’s currency monitoring list of trading partners whose currency practices “merit close attention,” after meeting the first two criteria during the four quarters through June last year.
Aggressive net purchases of the US dollar began in May last year, when the New Taiwan dollar strengthened sharply against the greenback, which came under pressure after US President Donald Trump announced “reciprocal” tariff policies in the month before, the central bank said in the report to lawmakers.
In the first half of the year, the US dollar index, which tracks the greenback against the currencies of Washington’s major trading partners, fell 10.7 percent. During the same period, the NT dollar rose 9.63 percent against the US dollar, prompting the central bank to make net purchases totaling US$13.25 billion.
The rapid appreciation of the NT dollar prompted central bank Governor Yang Chin-long (楊金龍) to step in to calm market sentiment, saying at the time that “the disorder [on the forex market] will end now.”
Market conditions shifted in the second half of the year. The US dollar index rose 1.49 percent, while the greenback gained 4.89 percent against the NT dollar, the central bank said.
At the same time, foreign institutional investors reduced their holdings and moved funds, including cash dividends, out of Taiwan, adding downward pressure on the local currency.
During the July-to-December period, the central bank sold US$5.56 billion more US dollars than it bought to support the NT dollar, the report showed.
Overall, the NT dollar rose 4.27 percent against the US dollar last year.
However, the increase was smaller than gains recorded by several other major currencies, including the Swiss franc, which rose 14.48 percent, the euro at 13.44 percent, the Australian dollar at 7.84 percent and the Singapore dollar at 6.25 percent, indicating the NT dollar remained relatively stable.
Taichung reported the steepest fall in completed home prices among the six special municipalities in the first quarter of this year, data compiled by Taiwan Realty Co (台灣房屋) showed yesterday. From January through last month, the average transaction price for completed homes in Taichung fell 8 percent from a year earlier to NT$299,000 (US$9,483) per ping (3.3m²), said Taiwan Realty, which compiled the data based on the government’s price registration platform. The decline could be attributed to many home buyers choosing relatively affordable used homes to live in themselves, instead of newly built homes in the city’s prime property market, Taiwan Realty
The government yesterday approved applications by Alphabet Inc’s Google to invest NT$27.08 billion (US$859.98 million) in Taiwan, the Ministry of Economic Affairs said in a statement. The Department of Investment Review approved two investments proposed by Google, with much of the funds to be used for data processing and electronic information supply services, as well as inventory procurement businesses in the semiconductor field, the ministry said. It marks the second consecutive year that Google has applied to increase its investment in Taiwan. Google plans to infuse NT$25.34 billion into Charter Investments Ltd (特許投資顧問) through its Singapore-based subsidiary Fructan Holdings Singapore Pte Ltd, and
JET JUICE: The war on Iran’s secondary effects have seen fuel prices skyrocket, knocking flight schedules down to earth in return as airlines struggle with costs Airline passengers should brace for more irritation in the next few months as carriers worldwide cancel flights and ground planes to cope with stratospheric increases in jet-fuel prices. Dutch flag carrier KLM is the latest company to cut its schedule, saying on Thursday that it would scrap 80 return flights at Amsterdam’s Schiphol Airport in the coming month. That puts it in the same league as United Airlines Holdings Inc, Deutsche Lufthansa AG and Cathay Pacific Airways Ltd, which have all pruned itineraries to mitigate costs. Global capacity for next month has been reduced by about 3 percentage points, with all
Micron Technology Inc is a driving force pushing the US Congress to pass legislation that would put new export restrictions on equipment its Chinese competitors use to make their chips, according to people familiar with the matter. A US House of Representatives panel yesterday was to vote on the “MATCH Act,” a bill designed to close gaps in restrictions on chipmaking equipment. It would also pressure foreign companies that sell equipment to Chinese chipmaking facilities to align with export curbs on US companies like Lam Research Corp and Applied Materials Inc. The bill targets facilities operated by China’s ChangXin Memory Technologies Inc
RSS