TAIPEI (Reuters) – Taiwan’s central bank said on Sunday it had banned Deutsche Bank from trading in deliverables and non-deliverables on Taiwanese dollars on Friday and suspended it for two years for foreign exchange trading as part of a crackdown. against speculation.
The Taiwanese dollar peaks at more than 23 years against the U.S. dollar as the island’s trade-dependent economy grows in global demand for its technology products as people work from home. The central bank has been particularly concerned about a case in which it said foreign banks were helping grain companies engage in currency speculation through out-of-pocket deliveries, affecting the stability of Taiwan’s foreign exchange market.
Sources told Reuters on Friday that the central bank had sent letters describing the punishments to Deutsche Bank, CitigroupInc, ING and Australia and New Zealand Banking Group Ltd (ANZ) for their involvement.
Aside from the punishment for Deutsche Bank’s Taipei branch, the central bank said in a statement that ING and ANZ offices in Taipei would not be allowed to trade free of Taiwanese dollars and not deliverable for nine months.
Citi’s Taipei office would be suspended from negotiating Taiwan dollar deliveries for two months, he added.
Citi and ANZ declined to comment. Representatives of the other two banks did not immediately respond to a request for comment.
The punishments will take effect on Monday, the central bank added.
Eugene Tsai, head of the central bank’s foreign exchange department, told Reuters that transactions carried out by banks in accordance with the rules before Friday had been completed on time.
He added that the punishment against Deutsche meant he would not be able to change currency options or swaps.
The central bank last month announced its investigation into the case, which it said involved eight grain trading companies.
Reports by Liang-sa Loh and Ben Blanchard; Edited by Christian Schmollinger and Kim Coghill