US keeps Taiwan on currency watch list

The United States supports Taiwan’s economic measures during the pandemic and said its intervention was not considered exchange rate manipulation

  • By Crystal Hsu / Staff Reporter

The United States has not found any of its major trading partners manipulating exchange rates to gain unfair competitive advantages, although seven economies, including Taiwan, are on its watch list, the central bank said yesterday.

The US Treasury Department announced its conclusion on Thursday in its semi-annual report to the US Congress on the macroeconomic and exchange rate policies of major trading partners.

Taiwan, along with China, Japan, South Korea, Germany, Malaysia and Singapore, is on the list.

Photo: Annabelle Chih, REUTERS

Taiwan’s large trade surplus and current account surplus with the United States have won it the spot, but there is no need for increased engagement, the central bank said.

Strong exports previously inflated Taiwan’s current account surplus and attracted speculative money, the central bank said.

In the latest report, the US Treasury reviewed and assessed the policies of major US trading partners that account for approximately 80% of US foreign trade in goods and services in the four quarters through June.

The global economy experienced supply and demand imbalances caused by the COVID-19 pandemic before Russia’s invasion of Ukraine, which drove up food, fertilizer and oil prices. energy, further increasing global inflation and increasing food insecurity, he said.

The report recognized that emerging and developing economies may need a range of approaches – including intervention – to respond to current global economic conditions.

However, the bulk of the interventions were aimed at strengthening their currencies rather than weakening them, according to the report.

Taiwan’s central bank said it intervened several times in the foreign exchange market this year to slow the depreciation of the New Taiwan Dollar caused by aggressive capital outflows in response to drastic monetary tightening by major central banks trying to rein in the currency. inflation.

US Treasury Secretary Janet Yellen said approaches to dealing with headwinds in the global economy were warranted in certain circumstances.

The US Treasury said it would stay in close contact with Switzerland over its monetary practices and trade imbalances.

Taiwan has held several meetings with the United States to exchange views on bilateral trade, the economy and exchange rates, the central bank said, adding that exchange rates largely reflect an economy’s fundamentals. .

The United States said it understands and supports Taiwan’s policy measures during the pandemic to support disadvantaged groups and boost domestic demand.

Taiwan’s communication channel with the U.S. Treasury is smooth and the two sides will continue to exchange views on economic and foreign exchange issues, the central bank said.

The report also reiterated the US Treasury’s call for increased transparency from China.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. The final decision will be at the discretion of The Taipei Times.

Previous Intelligent Ultrasound raises £5.2m for balance sheet and working capital
Next Udupi: Registration for fifth Manipal Marathon begins, MAHE announces prize money of Rs 15 lac