The issue of foreign exchange control discussed by Central Bank President Yang Jinlong in the Legislative Yuan yesterday (27) attracted market attention. In order to avoid misunderstandings by the outside world, the central bank issued a press release this evening (28) to emphasize that whether it is the tension between the two sides of the Taiwan Strait or the sharp interest rate hike in the United States, the The central bank will not adopt foreign exchange control measures if there is a large outflow of funds in the short term.
KMT legislator Zeng Mingzong asked when questioned yesterday, assuming cross-strait tensions or a sharp rise in interest rates in the United States, assuming foreign capital withdraws US$100 billion in a short period of time, how the central bank will respond; Yang Jinlong said in response to the question that the central bank is currently responding to the outflow of funds. All are very good, but if there is a large-scale withdrawal of funds, they will also consider whether to adopt capital controls. This remark has attracted great attention from the market.
The central bank said that since the beginning of this year, the U.S. interest rate hike has caused the international stock market to plummet, and foreign investors have sold super-Taiwan stocks and remitted funds. However, the current foreign exchange market operation is still quite smooth and stable. In response to foreign exchange market fluctuations.
As for the cross-strait situation, the central bank said that even in the 1995 Taiwan Strait missile crisis and the Chinese military exercise in early August this year, Taiwan has never implemented foreign exchange controls. Through foreign exchange control measures, financial market stability can be maintained.
As for the question raised by the legislators, “assuming cross-strait tensions or the US raises interest rates sharply, and a large amount of foreign capital withdraws in the short term,” the central bank stressed that if cross-strait relations become tense or the US raises interest rates sharply, the central bank will not adopt foreign exchange control measures.
The central bank said that as of the end of June this year, China’s foreign exchange deposits stood at US$549 billion, and foreign currency liquidity was as high as US$691.4 billion; my country’s international balance of payments was sound, foreign trade was in surplus, and foreign debt was extremely low; With more than US$270 billion and overseas net assets of more than US$800 billion, these resources are sufficient to cope with the substantial movement of international capital.
For example, the central bank took the Asian financial crisis in 1997, the global financial crisis from 2008 to 2012, the European debt crisis and other major international events. The central bank adopted flexible and effective monetary policy and foreign exchange management measures to stabilize the market and allow Taiwan to survive the crisis.