Taiwan’s central bank chief said on Thursday that there will be no foreign exchange controls during his term.
“Foreign exchange control measures will not be implemented in the short term,” said Yang Chin-long, when taking questions in parliament. Management measures are enough to keep market stability if there were large capital outflows, he added.
Yang’s five-year tenure is due to expire early next year, with the possibility that he could be appointed for a second term.
Also on AF: Chinese Yuan Rises From 14-Year Low After PBOC Warning
The Taiwan dollar has, like other major Asian currencies, depreciated sharply in recent weeks due to aggressive US interest rate increases and US dollar’s strength, as well as worries over slowing global economic growth.
It has lost 13% this year against the dollar.
Taiwan’s recent outflows of foreign capital were mainly due to US interest rate rises, added Yang, who believes the United States will continue to push up interest rates until the end of this year.
No Competitive Devaluation
The currencies of South Korea and Japan, competitor exporters of Taiwan, have also sharply fallen but Yang told lawmakers that he did not want to see competitive devaluations.
He was also questioned about the future direction of rate rises, the central bank having last week raised the benchmark discount rate by 12.5 basis points to 1.625%.
Yang said the economy’s performance and inflation would be closely watched over the next three months – the next rate setting meeting is scheduled for mid-December – but added that inflation and gross domestic product (GDP) forecasts were “still very unstable”.
- Reuters, with additional editing from Alfie Habershon
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