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Taiwan stocks fall slightly; U.S. keeps country on currency monitoring list
April 17, 2017 / 4:15 AM / 3 months ago

Taiwan stocks fall slightly; U.S. keeps country on currency monitoring list

3 Min Read

    TAIPEI, April 17 (Reuters) - Taiwan stocks fell slightly on
Monday, largely tracking regional shares and unnerved by the
U.S. Treasury's decision to keep Taiwan on a monitoring list for
its trade practices.
    The U.S. Treasury last week maintained that Taiwan's
material current account surplus merited Taiwan to stay on its
monitoring list, though it dropped a second criterion that
Taiwan had met in October of one-sided intervention in foreign
exchange markets.             
    "Treasury urges Taiwan's authorities to demonstrate a
durable shift to a policy of limiting foreign exchange
interventions to only exceptional circumstances of disorderly
market conditions," it warned.  
    As of 0338 GMT, the main TAIEX index         was down 0.16
percent at 9,717.28, after closing 1.1 percent lower in the
previous session.
    The electronics subindex         was 0.04 percent lower,
while the financial subindex         was down 0.55 percent.  
    Among actively traded stocks, Cathay Financial Holding
         , which is engaged mainly in the financing businesses,
dipped 0.84 percent. 
    In response to the U.S. Treasury's decision, Harry Yen,
director-general of the central bank's foreign exchange
department, told Reuters on Saturday that it may be difficult
for Taiwan to fix its current account surplus. 
    "The United States estimated the amount of intervention
accounted for 1.8 percent of GDP; the other criterion is related
to Taiwan's high savings rate, so there's no way to satisfy
that," Yen said. 
    Nevertheless, focusing on a bright spot, analysts said
Taiwan's efforts to let its currency strengthen paid off in the
U.S. Treasury's decision to drop the foreign exchange
intervention criteria, but cautioned the trend may not last.  
    "From the beginning of this year, the Taiwan dollar has
already strengthened quite a lot, but it likely won't go much
further as the impact will be on our exports," said Tony Chen, a
FX strategist at Taishin Financial Holdings. 
    "In Q2, we might even see some depreciation," he added.     
    
    On Monday, the Taiwan dollar          strengthened T$0.082
to stand at T$30.318 to the U.S. dollar.

 (Reporting by Jess Macy Yu and Liang-sa Loh in TAIPEI; Editing
by Subhranshu Sahu)
  

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