TAIPEI, May 18 (Reuters) - Taiwan’s central bank cautioned some banks on Monday against doing transactions that would strengthen the island’s dollar as the local currency reached its highest level in more than six months, said three traders.
The traders, who spoke on the condition of anonymity, separately said their financial institutions received calls from the central bank cautioning them against trades that would bolster the local currency.
A central bank official, who declined to be named, confirmed calls were made.
The Taiwan dollar closed the day a slight T$0.002 higher at T$30.610 to the U.S. dollar even though for most of the session it traded around T$30.42-T$30.43.
During the session, the local dollar strengthened to T$30.409, its strongest level since early November.
Taiwan is an export-oriented economy and a strong Taiwan dollar could crimp the earnings of its corporate sector.
One trader said his bank was told not to sell U.S. dollar options, while another said the his bank was directed to complete its trades by 2:30 pm local time, 90 minutes before the official close of the onshore foreign exchange market.
Taiwan’s central bank intervenes regularly in the local forex market to ensure stable trading in the Taiwan dollar. (Reporting by Emily Chan, Loh Liang-Sa and Jeanny Kao; Editing by Richard Borsuk)