Sunday, February 07, 2021
Support from speculators
Taiwan punishes Deutsche Bank
Taiwan's central bank accuses Deutsche Bank of supporting currency speculation on the local currency – this could destabilize the foreign exchange market in Taiwan. The largest German financial institution is therefore now excluded from certain transactions in the country.
The central bank in Taiwan banned Deutsche Bank from trading currency derivatives for two years in a fight against speculators. The Frankfurt financial institute is prohibited from trading deliverable and non-deliverable futures transactions in Taiwan dollars, the central bank announced. Due to global demand for technology products from Taiwan, the Taiwanese dollar has risen against the US dollar to its highest level in more than 23 years.
According to the central bank, a case in which foreign banks helped firms specializing in grain trading to engage in currency speculation with futures transactions caused displeasure. This could affect the stability of the Taiwanese foreign exchange market. As Reuters learned from insiders on Friday, the central bank has sent punitive letters to Deutsche Bank, Citigroup, ING and the Australia and New Zealand Banking Group (ANZ) for their involvement in the speculative business.
According to the central bank, ING and ANZ's Taipei branch will not be allowed to process futures transactions in Taiwanese dollars for nine months. Citi will be banned from trading deliverable Taiwan dollar futures for two months. The central bank said the penalties would go into effect on Monday. Citi declined to comment. Representatives of the other three banks could not be reached for comment at first.
. (tagsToTranslate) Economy (t) Deutsche Bank (t) Taiwan (t) Foreign exchange