Taiwan says U.S. understands its exchange rate policy stance
TAIPEI (Reuters) – The US understands Taiwan’s alternate price coverage stance and the 2 sides have “good” communication, a Taiwanese central financial institution official stated on Friday, after the U.S. Treasury put Taiwan on its monitoring listing.
The U.S. Treasury stated Taiwan continued to exceed some thresholds for doable forex manipulation and moved the island to its monitoring listing of companions that benefit shut consideration to forex practices and macroeconomic insurance policies.
The central financial institution official, talking on situation of anonymity, informed Reuters that over the previous yr or so Taiwan and the USA had been speaking through teleconference.
“We’ve good communication,” the official stated. “The U.S. aspect understands our coverage stance on the Taiwan greenback alternate price.”
The Taiwan greenback is down greater than 6% towards the U.S. unit this yr, monitoring broader weak point within the currencies of different Asian economies which depend on exports like South Korea.
The central financial institution stated in March that final yr it purchased a internet $9.12 billion to intervene within the overseas alternate market, down from a internet $39.1 billion for all of 2020 and equating to 1.2% of GDP, not exceeding the U.S. Treasury’s threshold of two% to be named a manipulator.
However Taiwan’s commerce surplus with the USA hit $40.2 billion in 2021, a historic excessive and up nearly 30% in contrast with 2020. Taiwan’s present account surplus final yr was 14.8% of GDP. Each exceed the U.S. Treasury’s standards for doable forex manipulation.
Taiwan and the USA will proceed to debate forex points, the central financial institution official added.
Taiwan’s exports have been boosted by its key position as a semiconductor producer, with Taiwanese corporations’ order books stored full by a worldwide chip scarcity that has notably affected the auto business.
Taiwan was final formally labelled a forex manipulator by the USA in December 1992.
(Reporting by Liang-sa Loh; Writing by Ben Blanchard, Enhancing by Angus MacSwan and Emelia Sithole-Matarise)
