TAIPEI, Oct 4 (Reuters) - Taiwan's central bank will intervene in the foreign exchange market if there are "extreme" fluctuations to maintain financia
TAIPEI, Oct 4 (Reuters) – Taiwan’s central bank will
intervene in the foreign exchange market if there are “extreme”
fluctuations to maintain financial stability, its governor Yang
Chin-long said on Wednesday.
The Taiwan dollar has lost more than 5% of its value
against the surging greenback so far this year and is at a more
than seven-year low, as the export-dependent economy faces
headwinds from slowing global demand for technology, Taiwan
being a major producer of semiconductors.
Taking lawmakers’ questions in parliament, Yang said the
central bank will intervene in the forex market as needed if
there are “extreme” fluctuations, as they seek to slow the
Taiwan dollar’s depreciation.
“If we don’t do this, it will threaten our financial
stability,” he added.
The U.S. Treasury Department in June kept Taiwan on a
monitoring list for close attention to foreign exchange and
economic policies.
Yang said Treasury “didn’t really mind” about Taiwan
intervening to arrest the Taiwan dollar’s depreciation.
The central bank this week said it sold a net $880
million to intervene in the forex market in the first half of
this year, stepping in to maintain smooth market operations as
the island contends with soft economic growth.
The central bank last month flagged continued tight
monetary policy as it keeps a close eye on inflation, and
trimmed its 2023 growth forecast for the export-reliant economy.
It also keep its benchmark interest rate unchanged.
Yang said the current global interest rate cycle was
nearing an end, and that Taiwan would be “no exception”.
(Reporting by Faith Hung and Liang-sa Loh; Writing by Ben
Blanchard; Editing by Tom Hogue and Kim Coghill)
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