Taiwan’s central bank said Friday that the U.S. government approves of Taipei’s foreign exchange policy since the COVID-19 pandemic began in early 2020, in response to Washington’s release of a report on trade partners’ exchange rate policies.
The U.S. Department of the Treasury released its semiannual Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States on Friday, Taipei time.
In this report Taiwan continued to be on the Treasury’s “Monitoring List” for possible currency manipulation, a status Taiwan has had since December 2020.
Also on the list are China, Japan, South Korea, Malaysia, Singapore and Germany.
Commenting on the report, the central bank said in a statement that Taiwan staying on the Monitoring List means it will not have to go through an “enhanced engagement” process with the U.S.
The central bank has held many productive discussions with the U.S. Treasury since April last year, which have helped to facilitate mutual understanding and improve Taiwan’s understanding of the U.S. stance on foreign exchange, it said.
The bank further said that the U.S. approved of and supported Taiwan continuing its mix of policies since the onset of the COVID-19 pandemic, including supporting domestic demand, and raising the labor share of income.
They also include insulating Taiwan from external shocks, providing the disadvantaged with fiscal support, working to build a “green” economy, diversifying its energy mix, and adopting a currency policy that faithfully reflects economic fundamentals, the central bank said.
The U.S. Treasury did not brand any of its major trading partners a currency manipulator based on data gathered from July 2021 through June 2022.
In the November 2022 report, the Treasury said that “Taiwan again exceeded the thresholds for two criteria over the four quarters through June 2022 as it did in the June 2022 Report for the four quarters though December 2021.”
“Taiwan had previously exceeded the thresholds for all three criteria as noted in the December 2021 and April 2021 Reports, in each of which Treasury conducted enhanced analysis of Taiwan,” the report noted.
“As Taiwan continues to meet two of the three criteria, Taiwan will remain on the Monitoring List,” the report stated. “Treasury continues to engage closely with Taiwan’s authorities.”
In April 2021, the U.S. Treasury said Taiwan had exceeded the thresholds for all three criteria, as did Switzerland and Vietnam, but President Joe Biden’s administration refrained from designating any of its trade partners a currency manipulator.
In December that year, Taiwan and Vietnam were again put on the U.S. Treasury’s list of major trading partners that had exceeded the thresholds for possible currency manipulation.
Source: Focus Taiwan News Channel