Taipei, April 7 (CNA) Taiwan’s central bank said Monday that it is prepared to stabilize the Taiwan dollar if necessary, as turbulence on global financial markets continues following the United States’ announcement of sweeping tariffs last week.
Speaking at a regular press briefing, Tsai Chiung-min (蔡炯民), head of the central bank’s Foreign Exchange Department, said the bank’s plans to stabilize the currency are “locked and loaded” should they be needed.
The measures include an instant notification mechanism for large forex settlements, preparations for maintaining foreign currency liquidity, and plans to enter the market should an imbalance in supply and demand cause excessive fluctuations in the Taiwan dollar’s exchange rate, Tsai said.
Despite fears that the Taiwan dollar would drop sharply against the U.S. dollar on Monday, it actually leveled off, reversing early losses to gain slightly, Tsai said.
Tsai’s comments came after the central bank made a scheduled announcement of its foreign exchange reserves through the end of March — meaning before the U.S. tariffs were announced on April 2.
According to the data, Taiwan had US$578.022 billion in forex reserves as of the end of March, up US$438 million from a month earlier.
The Taiwan dollar fell against the U.S. dollar during March, shedding NT$0.362, or 1.09 percent, as it slid from around NT$32.8 to above NT$33, the bank said.
Meanwhile, at the press briefing, Tsai was asked to respond to comments by an Academia Sinica economist who argued that the central bank should let the Taiwan dollar rise as Taiwan tries to reduce its trade deficit with the U.S.
In response, Tsai said the Taiwan dollar’s value would be determined by market forces, and that the central bank only stepped in at times of excessive exchange rate fluctuations or major imbalances between supply and demand.
Since 2010, the Taiwan dollar has appreciated by 19.4 percent, as measured by its nominal effective exchange rate (NEER), Tsai said.
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