TAIPEI (Reuters) – The United States understands Taiwan’s foreign exchange policy and the two sides have “good” communication, a Taiwanese central bank official said on Friday, after the U.S. Treasury put Taiwan on its foreign exchange list. surveillance.
The U.S. Treasury said Taiwan continues to exceed certain thresholds for possible currency manipulation and moved the island to its watch list of partners who deserve close attention to monetary practices and macroeconomic policies.
The central bank official, speaking on condition of anonymity, told Reuters that over the past year, Taiwan and the United States have been talking via teleconference.
“We have good communication,” the official said. “The US side understands our policy position on the Taiwan dollar exchange rate.”
The Taiwanese dollar is down more than 6% against the US unit this year, following broader weakness in the currencies of other export-dependent Asian economies like South Korea.
The central bank said in March that last year it bought $9.12 billion net to intervene in the foreign exchange market, compared to $39.1 billion net for all of 2020 and equaling 1. 2% of GDP, not exceeding the US Treasury’s 2% threshold. be called a manipulator.
But Taiwan’s trade surplus with the United States reached $40.2 billion in 2021, an all-time high and up nearly 30% from 2020. Taiwan’s current account surplus the year last was 14.8% of GDP. Both exceed US Treasury criteria for possible currency manipulation.
Taiwan and the United States will continue to discuss monetary issues, the central bank official added.
Taiwan’s exports have been boosted by its key role as a semiconductor producer, with Taiwanese companies’ order books full due to a global chip shortage that has particularly affected the automotive industry.
Taiwan was last officially labeled a currency manipulator by the United States in December 1992.
(Reporting by Liang-sa Loh; Writing by Ben Blanchard, Editing by Angus MacSwan and Emelia Sithole-Matarise)