Taiwan c.bank asks major exporters to spread out forex sales - sources (updated)

LITE-ON TECHNOLOGY

15/01/2021 07:13

(Adds details, byline)
    By Liang-sa Loh
    TAIPEI, Jan 15 (Reuters) - Taiwan's central bank began
meeting this week with major exporters to ask them to spread out
sales of foreign currency, four sources with direct knowledge of
the matter told Reuters, as it continues to try to rein in the
soaring local currency.
    The Taiwan dollar's  TWD=TP  5.6% gain against the greenback
last year was among the strongest in Asia and its rise extended
it to a fresh 23-1/2-year high of 27.938 per dollar on
Wednesday. It is up nearly 2% this year.
    Even though exports in 2020 hit a record high by value, the
currency's strength has vexed the government as it risks making
shipments from its manufacturing economy less competitive.
    At the same time, the authorities are wary of intervening
too heavily in the foreign exchange market and being labelled a
currency manipulator by the United States, the most important
backer of the Chinese-claimed island.
    Last month, the U.S. Treasury added Taiwan to a "monitoring
list" of countries whose currency practices had caused concern,
the first time the island has appeared on the list since 2017.
 urn:newsml:reuters.com:*:nL1N2IX03U
    The sources told Reuters that the central bank had invited
senior executives at major exporters to ask them to help ensure
stability in the foreign exchange market by spreading out their
sales of foreign currency.
    "Spreading out forex sales has been the central bank's
principle for many years now," said one of the sources, who like
the others spoke on condition of anonymity as they were not
authorised to speak to the media.
    The central bank did not respond to a request for comment.
    The central bank has been trying to exercise "moral
persuasion" with traders and bankers, rather than laying down
any new rules to control the Taiwan dollar's rise. urn:newsml:reuters.com:*:nL1N2JO0KB
    The sources said the central bank had talked to about 20
exporters, including Apple Inc  AAPL.O  supplier Foxconn
 2317.TW  and consumer electronics producer Lite-On Technology
Corp  2301.TW .
    Neither Foxconn nor Lite-On immediately responded to a
request for comment.
    In a Facebook post on Tuesday, the central bank said that a
stable foreign exchange rate was good for everyone.
    Taiwan's trade-dependent economy has rebounded strongly from
the impact of the COVID-19 pandemic, benefiting from global
demand for its tech goods as the outbreak forces millions to
work and study from home around the world. 
    The island's exports in 2020 rose 4.9% to $345.28
billion. urn:newsml:reuters.com:*:nL4N2J20JY

 (Reporting by Liang-sa Loh; Additional reporting by Yimou Lee,
and Tom Westbrook in Singapore; Writing by Ben Blanchard;
Editing by Jacqueline Wong)
 ((ben.blanchard@thomsonreuters.com;))