Taiwan raps 4 foreign banks amid soaring currency

By Riyaz ul Khaliq

ANKARA (AA) – Taiwan is penalizing at least four foreign banks for what it called “helping companies speculate in the foreign exchange market.”

Taiwan’s Central Bank said it found “through a bank exam in January that they helped grain companies engage with currency speculation through the trading of deliverable forwards,” daily Focus Taiwan reported on Monday.

It said the banks engaged in the process at a time when the “Taiwan dollar was moving higher against the US dollar, sparking an outcry among exporters.”

The report identified Deutsche Bank, ING Bank, Citibank, and the Australia and New Zealand Banking Group (ANZ) as the banks, with Deutsche Bank facing the “biggest penalty.”

The Taiwanese central bank imposed penalties on the banks starting today.

“The penalties came after the four banks failed to fulfill their responsibility to ‘know your customer’ and certify their clients' ‘actual needs’,” the central bank added.

Taiwan’s dollar is hitting its highest level against the US dollar in more than 23 years, the report said, due to “higher foreign fund inflows as the world's central banks pumped funds into markets to keep them liquid during the COVID-19 crisis.”

It said Taiwan’s dollar soared 5.6% last year.

The bank argued it intervened to “stabilize the market because of large and sudden capital flows that caused excessive volatility.”

Taiwan's forex reserves recently hit a record high, reaching $541.48 billion at the end of January.