TAIPEI (Reuters) - Taiwan’s central bank will continue a dialogue with Washington over the U.S. Treasury’s currency report even as Taipei was removed from Washington’s watchlist, deputy governor Ching-Long Yang said on Wednesday.
The semi-annual U.S. Treasury currency report, released on Tuesday, said Taiwan was removed from its currency “monitoring list” because it had continued to reduce the scale of its foreign exchange interventions since the April 2017 report.
Taiwan currently only meets one out of three criteria for the list, a “material current surplus”, the report said. In the October 2016 report, it met two criteria, including having engaged in persistent, one-sided intervention in foreign exchange markets.
The Treasury said an economy would be put on the monitoring list if it met two criteria or if it accounted for a large and disproportionate share of the U.S. trade deficit.
For two consecutive reports, Taiwan has only met the material current account surplus criteria.
China, Germany, Japan, South Korea, and Switzerland remain on the list of major trading partners that merit close attention to currency practices, the report said.
Taiwan’s central bank governor, Perng Fai-nan, made it his mission to get Taiwan off the U.S. government’s list of possible currency manipulators by turning on its head a decades-old policy of keeping the currency weak.
Recently, the trade-reliant island has reduced currency intervention to suppress the strength of the Taiwan dollar, allowing it to rise sharply instead and become one of Asia’s strongest currencies this year.
Nevertheless, the U.S. Treasury report said it remains “deeply concerned” by the significant imbalances in the global economy, and also by how bilateral trade imbalances with many major trading partners have grown to very large levels.
Taiwan’s trade surplus with the U.S. remains large. The January-September total was $4.943 billion, a 35 percent increase from $3.661 billion one year earlier, according to Reuters calculations based on finance ministry data.
The Treasury report said it will continue to urge Taiwan’s authorities to further increase the transparency of its foreign exchange market intervention and reserve holdings, as Taiwan is the only major emerging market economy in Asia not to publish data on the full details of its international reserves in accordance with International Monetary Fund (IMF) policies.
Reporting by Emily Chan and Jess Macy Yu; Editing by Richard Borsuk