Taipei, Nov. 8 (CNA) Taiwan’s continued inclusion on a currency manipulation monitoring list by the United States government is not surprising due to the nation’s economic structure, central bank officials said Wednesday.
In the latest report submitted to the US Congress on Tuesday, the Treasury Department said it found that no major US trading partner manipulated exchange rates to get an unfair competitive edge in international trade during the four quarters through June 2023.
However, Taiwan remained on the watch list for currency manipulation, as did China, Malaysia, Germany, and Singapore, while Vietnam was newly added to the list, according to the report.
The US Treasury report, published every six months, uses three criteria to determine if any of its trading partners should be named as currency manipulator nations.
The criteria are namely having a trade surplus with the US of at least US$15 billion, having a current account surplus of at least 3 percent of GDP, and persistent intervention in the foreign exchange market, shown by net purchases of foreign currency of at least 2 percent of GDP.
When an economy meets none or only one of the three criteria in two consecutive US currency reports, it is removed from the monitoring list.
According to the report, Taiwan met the trade surplus and current account surplus criteria but estimated that “foreign exchange intervention was limited in the first half of 2023, consistent with muted currency movements.”
In response, officials with the Central Bank of the Republic of China explained that it is natural for Taiwan to meet the first two criteria over the long-term due to its “economic structure.”
Being an export-oriented economy, Taiwan often has a trade surplus and current account surplus with the US, while the COVID-19 pandemic over the past few years also contributed to such surpluses due to growing demand in the US for digital communication services from Taiwan , the officials explained.
The central bank maintains smooth communication channels with the US, the officials said, stressing that both sides will continue to work to foster a strong and positive relationship.
(By Pan Tzu-yu, Frances Huang and Lee Hsin-Yin)