Taiwan Central Bank Acknowledges Regular FX Intervention
- Yang abandons “smoothing” euphemism for late-session paring
- Intervention necessary, driven by chip exports to U.S.: Yang
Taiwan’s central bank acknowledged in the clearest terms to date that it is intervening in foreign exchange markets, using the word that it had studiously avoided and vehemently protested until now.
Regular late-session moves by state-backed banks to pare gains by Taiwan’s currency against the dollar are “a kind of intervention,” Governor Yang Chin-long told reporters after Thursday’s decision to maintain record-low interest rates. He used the English word “intervention” in his otherwise all-Mandarin response to a reporter’s question. Previously Yang had referred to such actions as “smoothing”.
Daily efforts to stabilize the Taiwan dollar began in earnest in June of last year, holding at around the 29.5 level against the U.S. dollar until September. Since then, it appears that the bank has been managing the currency’s appreciation, with intraday trading crossing the 28 line during most sessions this year, before retreating at close.