Interventions aimed at currency stability, not exports: Central bank

Taipei, April 13 (CNA) Taiwan's central bank said Monday that its recent interventions in the foreign exchange market have been aimed at maintaining price stability rather than supporting local exporters.

At a legislative session on the long-term impact of Middle East conflicts on energy and consumer prices, Central Bank Deputy Governor Yen Tzung-ta (嚴宗大) said that exchange rate and price stability have long been prioritized over export considerations.

In March, Taiwan's foreign exchange reserves dropped by US$8.601 billion to US$596.886 billion, as the central bank launched a series of interventions in response to a strengthening U.S. dollar.

In a report to lawmakers, the central bank said Middle East tensions continued to drive up global crude and other commodity prices, but the resulting imported inflation pressures remained manageable.

Yen said the central bank will continue to stabilize the exchange rate to help cushion the domestic economy from global commodity price fluctuations.

Democratic Progressive Party (DPP) lawmaker Kuo Kuo-wen (郭國文) raised concerns about depreciation pressure on the New Taiwan dollar and its potential to exacerbate inflation.

Kuo asked whether the central bank might adjust its approach to capital flows to discourage foreign investors from immediately remitting funds abroad after selling Taiwanese stocks, which he said could help ease downward pressure on the currency.

Yen responded that such measures would be difficult to implement, citing the principle of free capital movement. He added that under current rules, if foreign investors do not immediately repatriate funds after selling shares, the capital must remain invested in Taiwan's stock market.