Taipei to continue talks with US after Treasury report
The central bank pledged yesterday to pursue “enhanced engagement” with the United States after Washington on Friday placed Taipei on a list of countries watched for currency manipulation.
The bank said it had held several rounds of talks with US officials on bilateral trade and currency since April last year, and made its position clear on the issues.
Citing the U.S. Treasury Department’s latest semi-annual currency report covering the last year, the bank said Washington agreed that “productive discussions have helped develop a common understanding of policy issues related to Treasury’s concerns about practices. currencies of Taiwan”.
“Over the next year, the central bank will continue its enhanced engagement with the United States on monetary issues,” she said, but did not comment on Taiwan’s performance on the specific thresholds cited in the statement. The report.
The report placed Taiwan and Vietnam on a list of countries watched for currency manipulation.
The three thresholds that the United States uses to determine currency manipulation are: a bilateral trade surplus in goods and services of at least $15 billion, a current account surplus equal to 3% of GDP, and foreign exchange interventions persistent and unilateral amounting to at least 2% of GDP.
According to the report, Taiwan’s bilateral trade surplus with the United States and current account surplus exceeded manipulation thresholds during the four-quarter benchmark period through December last year.
Taiwan recorded a bilateral trade surplus of $40 billion with the United States last year, up from $28 billion in 2020, and a current account surplus of $115 billion (14.8% of GDP), according to the report.
Taiwan was not cited for its excessive foreign exchange interventions last year, when the New Taiwan Dollar appreciated for the third consecutive year against the US dollar, by 2.95%.
Analysts said the central bank intervened in most forex sessions last year to limit NT dollar gains, but the bank never admitted this, saying only that it had a responsibility to fight. against volatility and maintain market stability.
This year, as the NT dollar weakened against the greenback due to rate hikes by the US Federal Reserve to fight inflation, Taiwan’s central bank stepped in to slow the depreciation of the local currency. , especially in March and April.
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