Cargill Inc and Deutsche Bank AG are among a group of major foreign companies under investigation in Taiwan for allegedly speculating on the surging local currency last year, hindering the central bank’s efforts to rein in a rampant foreign-exchange market.
Eight of Asia’s leading food traders, with the help of six overseas banks, built a combined US$11 billion in their New Taiwan dollar deliverable forwards positions as of the end of July last year, the central bank said in a statement last week.
Cargill and Louis Dreyfus Co were involved, along with Deutsche Bank, Citigroup Inc, JPMorgan Chase & Co and Standard Chartered PLC, said people with knowledge of the matter, who asked not to be identified because they are not authorized to speak publicly.
Photo: Chen Mei-ying, Taipei Times
ING Groep NV and Australia & New Zealand Banking Group are also being investigated, a person familiar with the situation said.
The positions were based on overseas physical grain trades deliberately transacted via their Taiwan units to speculate on the local currency, affecting market stability, the central bank said.
The companies, which the central bank has not identified, had ceased the trades by the end of July last year.
The central bank is to announce punishments for four of the banks soon.
It has already settled with two other lenders.
The monetary authority cannot sanction the grain firms, but it is preparing to hand over detailed information about the case to other government agencies, such as the Ministry of Finance and the Financial Supervisory Commission, to allow them to investigate further.
At least some of the trades were specifically designed to profit from the rising NT dollar, the sources said, presenting a direct challenge to the central bank as it battled to contain a rapidly rising currency in its efforts to maintain a stable financial environment for the export-dependent economy.
The central bank last week said that the huge positions the commodity companies built up in deliverable forwards went beyond their actual business needs.
None of the commodity trades behind the forward positions, nor the principle parties involved, were in Taiwan, it said.
“Speculation is typically frowned upon by the central bank, as it could destabilize markets and distort pricing,” Malayan Banking Bhd senior currency strategist Christopher Wong (黃經隆) said in a message.
“The punishment aims to send a deterrence message and the central bank can use this as a means of ‘reminding the markets’ not to be a menace,” Wong said.
The NT dollar strengthened more than 6 percent in the 12 months leading up to July 31 last year, the biggest gain among Asian currencies.
It has continued to appreciate since then, triggering ongoing interventions that the central bank Governor Yang Chin-long (楊金龍) says are merely intended to “smooth” the gains to maintain financial stability.
The US last month responded by putting Taiwan back onto its watchlist of potential currency manipulators and urging the central bank to allow the NT dollar to appreciate further.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest foundry service provider, yesterday said that global semiconductor revenue is projected to hit US$1.5 trillion in 2030, after the figure exceeds US$1 trillion this year, as artificial intelligence (AI) demand boosts consumption of token and compute power. “We are still at the beginning of the AI revolution, but we already see a significant impact across the whole semiconductor ecosystem,” TSMC deputy cochief operating officer Kevin Zhang (張曉強) said at the company’s annual technology symposium in Hsinchu City. “It is fair to say that in the past decade, smartphones and other mobile devices were
US-CHINA SUMMIT: MOFA welcomed US reassurance of no change in its Taiwan policy; Trump said he did not comment when Xi talked of opposing independence US President Donald Trump yesterday said he has not made a decision on whether to move forward with a major arms package for Taiwan after hearing concerns about it from Chinese President Xi Jinping (習近平). Trump’s comments on Taiwan came as he flew back to Washington after wrapping up critical talks in which both leaders said important progress was made in stabilizing US-China relations even as deep differences persist between the world’s two biggest powers on Iran and Taiwan. “I will make a determination,” Trump said, adding: “I’ll be making decisions. But, you know, I think the last thing we need right
TAIWAN ISSUE: US treasury secretary Scott Bessent said on the first day of meetings that ‘it wouldn’t be a US-China summit without the Taiwan issue coming up’ There were no surprises on the first day of the summit between US President Donald Trump and Chinese President Xi Jinping (習近平), the Mainland Affairs Council (MAC) said yesterday, as the government reiterated that cross-strait stability is crucial to the Asia-Pacific region, as well as the world. As the two presidents met for a highly anticipated summit yesterday, Chinese state media reported that Xi warned Trump that missteps regarding Taiwan could push their two countries into “conflict.” Trump arrived in China with accolades for his host, calling Xi a “great leader” and “friend,” and extending an invitation to visit the White House
SECURITY: Taipei presses the US for arms supplies, saying the arms sales are not only a reflection of the US security commitment to Taiwan but also serve as a mutual deterrent against regional threats Taiwan is committed to preserving the cross-strait “status quo” and contributing to regional peace and stability, the Presidential Office said yesterday. “It is an undeniable fact that the Republic of China is a sovereign and independent democratic nation,” Presidential Office spokeswoman Karen Kuo (郭雅慧) reiterated, adding that Beijing has no right to claim sovereignty over Taiwan. The statements came after US President Donald Trump warned against Taiwanese independence. Trump wrapped up a state visit to Beijing on Friday, during which Chinese President Xi Jinping (習近平) had pressed him not to support Taiwan. Taiwan depends heavily on US security backing to deter China from carrying
RSS