Central Bank Seeks Feedback
Taiwan’s central bank is considering a new rule that would require foreign investors to submit proof of their stock orders before they can buy the local currency. This plan aims to limit speculative bets on the currency.
What the Plan Involves
- Investors must show a valid order confirmation before buying Taiwan dollars.
- Currency conversion will only be allowed the next day.
Reason Behind the Move
The Taiwan dollar grew by nearly 14% this year, strengthening too fast. That has hurt exporters and insurers, so the central bank wants to slow down speculation.
Risks and Responses
- This rule may slow down stock purchases because currency will not be available immediately.
- The bank is asking custodians for feedback and plans a meeting with them next week.
- The central bank has not yet commented officially.
This plan is part of broader steps, including telling investors to stop currency bets via ETFs and forming a task force for exporters, to balance currency and help the economy.