Taiwan central bank urges traders to show restraint selling dollars

Staff member stands beside the Taiwanese Central Bank logo in Taipei
FILE PHOTO: A staff member stands beside the Taiwanese Central Bank logo in Taipei, Taiwan February 26, 2018. REUTERS/Tyrone Siu

September 13, 2020

TAIPEI (Reuters) – Taiwan’s central bank on Sunday said it was urging foreign exchange traders to exercise restraint when it came to selling U.S. dollars and not sell large amounts in one go, as it tries to control the soaring value of its own currency.

The central bank has asked forex traders not to execute individual sell orders for the U.S. dollar worth more than $5 million at a time, three sources with direct knowledge of the situation told Reuters on Friday.

In its statement, the central bank said that recently a small number of banks had tried selling large amounts of U.S. dollars in a single offer, affecting “market trading speed and the rights of other banks making offers”.

The bank said it is asking traders not to sell large amounts of U.S. dollars in a single trade, though it did not mention a specific figure.

The Taiwan dollar <TWD=TP> has appreciated 2.85% so far this year against the greenback, worrying the government as it seeks to support companies in its export-reliant economy after a sharp drop in global demand.

Taipei is also wary about being labelled a currency manipulator by the United States.

(Reporting by Liang-sa Loh; Writing by Ben Blanchard; Editing by Catherine Evans)