{"id":183,"date":"2025-07-14T01:58:55","date_gmt":"2025-07-14T01:58:55","guid":{"rendered":"https:\/\/www.worldpumpnews.com\/?p=183"},"modified":"2025-07-14T01:58:55","modified_gmt":"2025-07-14T01:58:55","slug":"taiwans-central-bank-tells-foreign-investors-to-stop-violating-capital-controls","status":"publish","type":"post","link":"https:\/\/www.worldpumpnews.com\/?p=183","title":{"rendered":"Taiwan\u2019s central bank tells foreign investors to stop violating capital controls"},"content":{"rendered":"<p><\/p>\n<div>\n<p>Stay informed with free updates<\/p>\n<p class=\"article__content-sign-up-topic-description o3-type-body-base\"><span>Simply sign up to the <!-- -->Foreign exchange<!-- --> myFT Digest &#8212; delivered directly to your inbox.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=d1155857-5e05-4797-b617-aa838f3778fb&amp;concept-id=049291ca-c558-4b3d-ac99-cdc2e19dfc46\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Taiwan\u2019s central bank has warned \u201ca few foreign investors\u201d against violating its capital controls as it seeks to contain volatility in its rapidly appreciating currency.<\/p>\n<p>In a statement to the Financial Times, the Central Bank of the Republic of China said it had \u201cstrengthened communication with a few foreign investors\u201d and \u201casked them to self regulate and make necessary improvements\u201d after finding that foreign capital inflows were not being invested in domestic securities. It did not name the investors.<\/p>\n<p>The warning comes as the central bank seeks to rein in the New Taiwan dollar\u2019s sharp rally without being labelled as a currency manipulator by the US. The Taiwan dollar has strengthened more than 10 per cent this year, threatening an economic model built around the country\u2019s enormous trade surplus.<\/p>\n<p>Taiwan is currently on the US Treasury\u2019s monitoring list for currency manipulation. Large interventions to contain the Taiwan dollar\u2019s appreciation would risk it being classified as a full-blown manipulator, said Lemon Zhang, a foreign exchange and emerging markets macro strategist at Barclays.<\/p>\n<p>In order to reduce appreciation pressures without intervening, the central bank is stepping up efforts to \u201cclose loopholes and discourage speculative shorts\u201d, said Zhang.<\/p>\n<figure class=\"n-content-image n-content-image--full\" data-component=\"image-set\"><picture><source media=\"(min-width: 700px)\" srcset=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A3102b867-769b-4ce4-9c28-3d4f8dcf2945?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=1 1x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A3102b867-769b-4ce4-9c28-3d4f8dcf2945?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=2 2x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A3102b867-769b-4ce4-9c28-3d4f8dcf2945?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=3 3x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A3102b867-769b-4ce4-9c28-3d4f8dcf2945?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=4 4x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A3102b867-769b-4ce4-9c28-3d4f8dcf2945?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=5 5x\" width=\"3500\" height=\"2500\"\/><source media=\"(max-width: 490px)\" srcset=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A2874d9ae-4d9d-49be-93e8-a3bd2a7d54c2?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=490&amp;dpr=1 1x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A2874d9ae-4d9d-49be-93e8-a3bd2a7d54c2?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=490&amp;dpr=2 2x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A2874d9ae-4d9d-49be-93e8-a3bd2a7d54c2?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=490&amp;dpr=3 3x\" width=\"1500\" height=\"2000\"\/><img decoding=\"async\" src=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/https%3A%2F%2Fd6c748xw2pzm8.cloudfront.net%2Fprod%2F230d8200-5e39-11f0-9435-6ff875679c3e-standard.png?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=1\" alt=\"Line chart of  showing The Taiwan dollar has appreciated more than 10% this year\" data-image-type=\"graphic\" width=\"3500\" height=\"2500\" loading=\"lazy\"\/><\/picture><\/figure>\n<p>Taiwan requires foreign investors who convert money into Taiwan dollars to use the cash for investment. Violating the regulations can hamper investors\u2019 ability to work in the country, giving the central bank an indirect channel to influence exchange rates, said analysts, although the bank\u2019s foreign exchange regulations say \u201cthere are effectively no foreign exchange restrictions in Taiwan\u201d.<\/p>\n<p>\u201cNot many people want to go against the [central bank] openly,\u201d said Kiyong Seong, lead Asia macro strategist at Soci\u00e9t\u00e9 G\u00e9n\u00e9rale.<\/p>\n<p>\u201cYou can\u2019t effectively operate in Taiwan if you don\u2019t have a healthy relationship with the central bank,\u201d added Brad Setser, a senior fellow at the Council on Foreign Relations and former US Treasury official.<\/p>\n<p>Taiwan\u2019s currency began experiencing volatility in early May, when it appreciated more than 9 per cent against the US dollar over three trading days.<\/p>\n<p>The rally was driven largely by the country\u2019s exporters repatriating assets and by life insurers with large US holdings rushing to hedge their exposure to a weakening US currency.<\/p>\n<p>Taiwan\u2019s export-dependent economy has vast US dollar holdings. Exports last year reached a record $475bn and comprised about 60 per cent of GDP, double the global average, according to the World Bank. A sharply appreciating home currency threatens to erode the value of those assets and make Taiwan\u2019s products less competitive globally in the long term.<\/p>\n<p>The central bank has sought to calm markets by discouraging currency speculation. It warned importers and exporters last month against speculating on exchange rates and spoke out against investors using a combination of exchange traded funds and inverse ETFs to take positions on the Taiwan dollar.<\/p>\n<aside aria-labelledby=\"aside-label\" class=\"n-content-recommended--single-story n-content-recommended--inset\" data-component=\"recommended\">\n<p class=\"n-content-recommended__title o3-type-body-highlight\">Recommended<\/p>\n<div class=\"o-teaser o-teaser--article o-teaser--small o-teaser--stacked o-teaser--has-image js-teaser\" data-id=\"03f6831d-d4f3-42f8-99f4-d40daa25cd5d\">\n<div class=\"o-teaser__image-container js-teaser-image-container\">\n<div class=\"o-teaser__image-placeholder\" style=\"aspect-ratio:1422\/800\"><img decoding=\"async\" class=\"o-teaser__image\" src=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/https%3A%2F%2Fwww.ft.com%2F__origami%2Fservice%2Fimage%2Fv2%2Fimages%2Fraw%2Fhttps%253A%252F%252Fd1e00ek4ebabms.cloudfront.net%252Fproduction%252F86d6196b-9fb0-4a23-8dff-5f205ff466a5.jpg%3Fsource%3Dnext-article%26fit%3Dscale-down%26quality%3Dhighest%26width%3D700%26dpr%3D1?source=next&amp;fit=scale-down&amp;dpr=2&amp;width=240\" alt=\"\"\/><\/div>\n<\/div>\n<\/div>\n<\/aside>\n<p>In May, it launched investigations into the local banking sector to discourage speculation. The central bank has also said it would consider imposing trading delays on foreign investors deemed to be speculating on the currency.<\/p>\n<p>But it is fighting against what market observers describe as Asian currencies\u2019 structural appreciation against the US dollar.<\/p>\n<p>\u201cTaiwan dollar appreciation is not purely coming from speculation,\u201d said Seong. Analysts have noted that the transactions of life insurers and exporters, along with speculative financial flows, are all working to strengthen the currency.<\/p>\n<p>\u201cPeople pile on, there\u2019s pressure,\u201d said Setser. \u201cOnce things start to move, they continue to move. There needs to be a new equilibrium.\u201d<\/p>\n<\/div>\n<p>#Taiwans #central #bank #tells #foreign #investors #stop #violating #capital #controls<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Stay informed with free updates Simply sign up to the Foreign exchange myFT Digest &#8212; delivered directly to your inbox. Taiwan\u2019s central bank has warned \u201ca few foreign investors\u201d against violating its capital controls as it seeks to contain volatility in its rapidly appreciating currency. In a statement to the Financial Times, the Central Bank [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":184,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[129,234,229,235,231,42,232,228,230,233],"class_list":{"0":"post-183","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-bank","9":"tag-capital","10":"tag-central","11":"tag-controls","12":"tag-foreign","13":"tag-investors","14":"tag-stop","15":"tag-taiwans","16":"tag-tells","17":"tag-violating"},"_links":{"self":[{"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/posts\/183","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=183"}],"version-history":[{"count":0,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/posts\/183\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/media\/184"}],"wp:attachment":[{"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=183"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=183"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=183"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}