Taiwan penalized Deutsche Bank AG and three other foreign lenders following an investigation into speculation about the growing local currency last year involving grain companies.
Deutsche Bank’s trade approvals for transfers in Taiwanese and non-deliverable dollars will be revoked, and it will be banned from participating in foreign exchange derivative transactions for two years, the island’s central bank said on Sunday.
ING Groep NV i Australia and New Zealand Banking Group Ltd. will not be allowed. engage in forward and non-deliverable business operations in Taiwan dollars for nine months while Citigroup Inc. has banned from negotiating out Taiwanese dollar deliveries for two months, the central bank said. Sanctions imposed on local units will take effect on Monday.
Punishments were reported to banks on Friday. Operations carried out before the warning will not be affected, the central bank said.
Citigroup declined to comment. Deutsche Bank, ING and ANZ did not immediately respond to calls seeking comments outside business hours.
Eight major Asian food traders, with the help of six overseas banks, built a total of $ 11 billion in their Taiwanese dollar delivery positions in late July, the central bank he said last month. The positions were based on overseas physical grain operations that were deliberately traded through their Taiwanese units to speculate on the local currency, which affected market stability.
Cargill Inc. participated. and Louis Dreyfus Co., along with Deutsche Bank, Citigroup, JPMorgan Chase & Co. and Standard Chartered Plc, among others, Bloomberg News was reported in January, citing people with knowledge of the matter. At least some of the businesses were specifically designed to benefit from the rising Taiwan dollar, family members said.
The island’s dollar has strengthened by almost 7% against the US dollar in the last twelve months, among the best artists in the region, according to Bloomberg data.
The central bank was set up with two lenders in November, it said Sunday, without identifying them. The six banks violated the rules because forward operations had to be conducted based on their actual needs, the central bank said on Sunday.
According to Eugene Tsai, CEO of the foreign exchange department, Deutsche Bank may re-apply for revoked trading approvals in the future based on the improvements.
The central bank of Taiwan strictly regulates the amount of its dollars that foreign companies can accumulate to prevent currency speculation. He had said that the huge positions that commodity companies accumulated to advance deliverables went beyond their actual business needs.
– With the assistance of Argin Chang
(Probe updates from the fifth paragraph.)