Taiwan Curbs Bullish Currency Bets as Yen Threatens Exports
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Taiwan, seeking to rein in the local dollar and boost export competitiveness, tightened limits on domestic banks’ bullish bets on the currency following the yen’s tumble to the lowest level since 2008.
The Central Bank of the Republic of China (Taiwan) reduced the daily cap on the net U.S. dollar short position that can be held by each bank to $5 million from $10 million, according to Spencer Lin, director general of foreign exchange. The rule, which aims to “stabilize” the Taiwan dollar, comes into effect today, he said in a phone interview. A short position in the greenback is a bet on depreciation against the local currency and traders were informed of the clampdown yesterday.