Taiwan cut from U.S. watch list for FX practices

台灣獲移出美國操縱匯率觀察名單

China, South Korea, Japan, Germany and Switzerland remain on the list

TAIPEI (Taiwan News) – Taiwan has been?cut from Washington’s currency watch list, while the latest report is asking Taiwan to increase transparency in its foreign-exchange interventions and reserve holdings.

The United Sates Treasury released its biannual report on Tuesday and said no major trading partner is manipulating its currency to gain advantage in trade with the U.S., Reuters reported.

Washington softened?criticism of China in the report, saying Beijing?is acting to avoid disorderly depreciation and allowing the yuan to rise against the dollar this year, while the world’s second largest economy by nominal GDP remains on the watch list.

The change of the rhetoric is said to be associated with U.S. President Donald Trump’s attempt to seek China’s support on North Korea issue during?his upcoming travel to Asia in November. Trump is scheduled to meet with President Xi Jinping during his stay in China, according to a?Bloomberg report. ?

Nations on the watch list are considered having a huge trade surplus, a high current-account surplus, or continuous intervention in its currency market. Nations that match any of the two will be placed?on the watch list, and countries which match all three criteria will be considered a currency manipulator.

Apart from China, South Korea, Japan, Germany and Switzerland remain on the list.

Although Taiwan has been?removed from the monitoring list due to its diminished intervention to suppress the strength of its currency, the report is urging the economy to "further increase the transparency of its foreign exchange market intervention and reserve holdings."

Taiwan's deputy central bank?governor Yang Ching-long said that the report should have taken Taiwan off the list earlier as the country only matched one criterion two times in a row; Yang?attributed the off-list to the central bank's continuous dialogues with Washington.?