Taiwan c.bank plans to limit overseas loan remittances for firms

  • 2/3/2021
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TAIPEI, Feb 3 (Reuters) - Taiwan’s central bank said on Wednesday that it plans to put restrictions on remittances from overseas loans taken out by companies, as it seeks to crack down on opportunities to speculate in the rapidly appreciating Taiwan dollar. Sources told Reuters last month that the central bank had sent inspectors to domestic banks to investigate whether exporters were speculating in foreign currency using foreign loans as the Taiwan dollar soars against the U.S. dollar. The central bank said that it was still looking at what those restrictions might be in terms of an actual figure and did not give a timeline for when the new rules might be applied. The Taiwan dollar’s 5.6% gain against the U.S. dollar last year made it one of the strongest currencies in Asia. It has gained about 2% against the U.S. dollar this year and is currently at a 23-1/2 year high against the U.S. unit. The central bank said last month that companies should not use foreign loans to engage in forex speculation. Even though exports in 2020 hit a record high by value, the currency’s strength has vexed the government as it risks making shipments from its manufacturing economy less competitive. At the same time, authorities are wary of intervening too heavily in the foreign exchange market and being labelled a currency manipulator by the United States, the most important backer of the Chinese-claimed island. In December, the U.S. Treasury added Taiwan to a “monitoring list” of countries whose currency practices had caused concern, the first time the island has appeared on the list since 2017. (Reporting by Liang-sa Loh and Yimou Lee; Writing by Ben Blanchard Editing by Robert Birsel)

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