Taipei: Taiwan’s central bank and the U.S. Treasury have reached an agreement to avoid manipulating exchange rates, maintaining close consultations on foreign exchange and macroeconomic matters. In a joint statement, both parties committed to refraining from actions that could distort the international monetary system or provide unfair competitive advantages.

According to Focus Taiwan, the joint statement outlines that macroprudential or capital flow measures will not target exchange rates for competitive purposes. Additionally, public investment tools, such as pension funds invested overseas, will also not target exchange rates to gain competitiveness. The agreement emphasizes that any foreign exchange market interventions should address only excessive volatility and disorderly exchange rate movements.

Both entities recognize the need for transparent exchange rate policies, agreeing to disclose any forex intervention operations quarterly. The disclosure will adhere to the International Monetary Fund’s Data Template on International Reserves and Foreign Currency Liquidity. Previously, Taiwan’s central bank disclosed market intervention data biannually.

Taiwan’s central bank, in a separate statement, clarified that the U.S. Treasury has not demanded an appreciation of the Taiwan dollar against the U.S. dollar, dispelling market speculation about pressure from Washington during tariff negotiations. The bank emphasized that it is not involved in Taiwan’s tariff negotiations and that the joint statement is unrelated to ongoing bilateral talks.

The central bank also noted that future market interventions would aim to smooth volatility in both directions, aligning with its foreign exchange policy principles. After discussions with the U.S. Treasury, Taiwan’s central bank has committed to releasing market intervention data quarterly, starting from December.

In a previous disclosure, the central bank revealed purchasing US$13 billion more U.S. dollars than it sold in the first half of the year to prevent excessive appreciation of the Taiwan dollar. During this period, the U.S. dollar declined by 9.63 percent against the Taiwan dollar, driven by concerns over U.S. policy uncertainties. Analysts suggested that without intervention, the U.S. dollar would have depreciated further.