Taiwan stays off U.S. currency monitoring list

2018/04/14 20:03:44 fontsize-small fontsize-default fontsize-big
Taiwan stays off U.S. currency monitoring list

Taipei, April 14 (CNA) Taiwan has remained off the U.S. currency watch for a second time since October 2017 and will keep a close eye on exchange rates to minimize their impact on trade, a bureau under the Ministry of Economic Affairs said Saturday.

In its twice-yearly foreign-exchange policy report released on Friday, the U.S. Department of Treasury found China, Japan, South Korea, Germany, Switzerland and for the first time India as economies that deserve further monitoring for potential unfair currency practices.

While Taiwan has previously been on the watch list three times, it has managed in the most recent two reports to keep off it by meeting only one of the three criteria used to determine if a country should be monitored.

The one criteria was Taiwan having a large material current account surplus in 2017 of 14.6 percent of GDP, which the Bureau of Foreign Trade said was inevitable because it is a small, open economy that relies heavily on foreign trade.

The Treasury Department requires that economies meet two of three criteria to be put on the currency monitoring list.

The three criteria are a bilateral trade surplus with the U.S. of at least US$20 billion; a material current account surplus of at least 3 percent of GDP; and persistent, one-sided intervention in the foreign currency market.

When Taiwan was removed from the list back in October 2017, then Central Bank Deputy Governor Yang Chin-long (楊金龍) attributed it to the central bank's efforts to reduce its intervention in currency markets.

To keep Taiwan off the next list in October 2018, the bureau said that it and relevant agencies will pay close attention to markets and remind importers and exporters of currency rate fluctuations while responding with timely countermeasures.

The April report, which looks at 13 of the U.S. major trade partners, did not list any country, including China, as a currency manipulator despite President Donald Trump's repeated claims that he would do so during his presidential campaign.

Notably, however, China is the only country on the list that only met one of the criteria, with the report noting that China "constitutes a disproportionate share of the overall U.S. trade deficit."

Only when a country has met all three criteria is it named a currency manipulator, something that has not happened since 1994.

(By Kuan-lin Liu and Chiu Po-sheng)

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