Taiwan central bank tells financial firms to follow forex rules

Taiwan’s central bank has told financial institutions to enforce foreign‑exchange rules more strictly after the Taiwan dollar appreciated more than 10 % earlier this month, heightening profit‑erosion risks for exporters and life insurers. The regulator said some offshore funds earmarked for securities investment were instead left in NT‑dollar demand deposits, while certain companies and individuals converted foreign loans into local currency without clear economic purpose, adding volatility to the market. Banks must verify the necessity of each foreign‑currency loan, forward contract and large NT‑dollar conversion, ensuring supporting documents match declared intentions under the “real‑need” principle. The watchdog pledged action against speculative flows, aiming to keep capital movements aligned with stated uses and help stabilise the foreign‑exchange market.