TAIPEI, Sept 11 (Reuters) - Taiwan’s central bank has asked forex traders to limit their U.S. dollar sales as it tries to keep a lid on the soaring value of the export-dependent island’s own currency, three sources with direct knowledge of the situation said on Friday.
The Taiwan dollar has appreciated 2.85% so far this year against the greenback, worrying the government as it seeks to support exporters after a sharp drop in global demand. Taipei is also wary about being labelled a currency manipulator by the United States.
The three sources said that Taiwan’s central bank has sent out an order saying that traders could not execute individual sell orders for the U.S. dollar worth more than $5 million at a time.
The central bank hopes that this can help reduce the pressure on U.S. dollar sales, the sources added.
The order began being sent to major banks on Friday afternoon, they said.
The central bank did not answer telephone calls seeking comment.
A strong Taiwan dollar hurts the competitiveness of the island’s small and medium sized companies, which are a pillar of the economy. While exports have picked up in the last two months, the coronavirus pandemic and U.S.-China trade tensions remain major sources of uncertainty.
The strong Taiwan dollar has caused concern at the highest levels of government, and the central bank has been intervening to try and prevent it appreciating further, sources have previously told Reuters. (Reporting by Liang-sa Loh; Writing by Ben Blanchard; Editing by Kim Coghill)
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