Sat, Jun 07, 2025 page1

• Taiwan remains on US’ currency monitoring list

  TRADE TALKS: Taipei met the treasury department’s criteria for trade and current account surpluses, and the US did not ask it to appreciate its currency

  • By Crystal Hsu / Staff reporter
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  The US Department of the Treasury has retained Taiwan on its currency monitoring list, a move that reflects smooth communication between Taiwan and the US, and the absence of appreciation pressure on the New Taiwan dollar amid efforts to ease bilateral trade imbalances, the central bank said yesterday.

  The treasury department on Thursday delivered its semiannual report to the US Congress on macroeconomic and foreign exchange policies of major US trading partners and named nine economies, including Taiwan, on the monitoring list.

  Other economies on the list are China, Japan, South Korea, Singapore, Vietnam, Germany, Ireland and Switzerland.

  

  Central bank Governor Yang Chin-long speaks at a news conference at the central bank in Taipei on March 20.

  Photo: CNA

  The US’ trading partners are evaluated based on three criteria: a bilateral goods trade surplus with the US exceeding US$15 billion, a current account surplus above 3 percent of GDP and net foreign exchange purchases exceeding 2 percent of GDP over a 12-month period, the treasury said.

  For decades, unfair currency practices abroad have contributed to the US’ trade deficit and hollowed out US manufacturing, the treasury said on its Web site

  The department said it would continue to closely monitor whether trading partners engage in foreign exchange interventions or employ non-market policies to manipulate their currencies, adding that such actions could undermine US economic recovery and create unfair competitive advantages.

  Taiwan’s trade surplus with the US reached US$74 billion last year, while its current account surplus stood at 14.2 percent of GDP, the central bank said yesterday, citing the US report.

  However, the central bank sold its holdings of greenback by US$16 billion to stabilize the local currency, a sum equivalent to 2.1 percent of Taiwan’s GDP, it said.

  Taiwan met two of the treasury’s three criteria for inclusion on the monitoring list: a significant trade surplus with the US and a current account surplus above the designated threshold, driven by US technology giants’ purchase of chips and other electronic components used in smartphones and artificial intelligence infrastructure, the central bank said.

  The report indicated that Washington would continue monitoring potential risks in the non-bank financial sector, including foreign exchange risks, and that Taiwan’s central bank interventions should be limited, allowing exchange rates to move in line with underlying economic fundamentals, the central bank said.

  The suggestions confirmed that “there had been no US request for appreciation of the local currency,” the central bank said, following an 8 to 9 percent appreciation of the NT dollar against the US dollar in recent weeks.

  Some observers have said that the recent appreciation of the NT dollar reflects Taipei’s efforts to placate Washington during ongoing bilateral trade talks.

  However, the central bank has reiterated that the currency’s rise is primarily driven by Taiwan’s strong first-quarter GDP growth, currency speculation by foreign capital and concerns among local exporters over potential exchange rate losses.

  Communication with the US Treasury remains smooth and constructive, and Washington’s recommendations are largely aligned with its own monetary and exchange rate policies, it said.

  The NT dollar has stabilized since the middle of last month, the central bank added.
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