UPDATE 2-Taiwan curbs capital inflows with eye on currency

* Move seen aimed at curbing currency speculation

* Over T$4.6 tln in fund inflows, 0.21 pct in time deposits

* Central bank said in Oct more than T$500 bln sitting idle

* T$ dollar to weaken, Thailand has similar concerns - HSBC

(Adds c.bank confirmation, details, background)

By Rachel Lee and Kelvin Soh

TAIPEI, Nov 10 (Reuters) - Taiwan imposed capital controls on Tuesday, banning foreign funds from investing in time deposits in a move that appeared to be aimed at deterring bets on currency appreciation.

The central bank, which announced in October that foreigners had parked about T$500 billion ($15.5 billion) in Taiwan dollar accounts, said it wanted investors betting on Taiwan's economy to put their money in stocks. The ban, announced by the financial regulator, reflects concern among policymakers in some emerging markets that the inflow of money could create asset price bubbles and boost their currencies to levels that would undermine exports.

Last month, Brazil announced a 2 percent tax on foreign investment in stocks and fixed-income securities to contain the rapid strengthening of the real (BRBY).

Over T$4.63 trillion of foreign funds flowed into Taiwan up to September this year, the Financial Supervisory Commission said, with about 0.21 percent of that being placed in time deposits.

"If they're putting money in Taiwan they should put it in stocks," Lin Sun-yuan, the director-general of the foreign exchange department at Taiwan's central bank told Reuters. "Why would you want to put it in a time deposit?"

The ban would take effect immediately, Lu Ting-chieh, chief secretary of the Financial Supervisory Commission, said at a news conference. Taiwan's economy relies on exports, with technology companies such as TSMC (2330.TW) and Acer (2353.TW) depending on overseas markets for much of their revenue. Any currency appreciation threatens their bottom line.

"This is very clearly a move to stop speculation in the Taiwan dollar," said Ma Tieying, an economist at DBS in Singapore.

"There's a lot of foreign funds that are betting on emerging markets such as Taiwan, and with the central bank trying to keep the currency weak, this seems like a first step it's taking."

The Taiwan dollar has appreciated 1.7 percent against the U.S. dollar this year and, along with the Chinese yuan CNY=, has lagged the broader gains in other Asian currencies.