Taiwan reports $99b in currency swaps

Bloomberg

Taiwan’s central bank disclosed its outstanding position in foreign-exchange swap trading, a rare move aimed at answering calls for improved transparency.
The bank’s outstanding position in foreign-exchange swap trading was $99.1 billion at the end of February, the central bank’s Governor Yang Chin-long wrote in a report prepared for legislators. The central bank purchased a net $5.5 billion in the spot currency market in 2019 to maintain market order, the report said. That compares with no net purchases for 2018, according to last year’s report, which omitted data on swaps positions.
Taiwan’s actions in the foreign-exchange market have prompted recent attention, with the US Treasury saying in January it was “concerned” about a report from the Council on Foreign Relations that estimated Taiwan had conducted undisclosed intervention in the swap market.
Taiwan isn’t on the US currency monitoring list, but is close to triggering key thresholds, according to the Treasury’s report, which noted that Taiwan was the only major Asian economy that didn’t publish full details on its international reserves in accordance with the International Monetary Fund’s standards.
Taiwan’s central bank later denied using swaps to intervene in the currency market, but some current board members urged the it to disclose data according to the IMF standard.
The central bank said in the report that it uses tools such as foreign-exchange swaps to provide dollars and lower funding costs for banks and companies, as well as absorbing excess Taiwanese currency. The report will be presented to the legislature’s finance committee, and was released to the media.
The total foreign currency liquidity of the central bank was $625.9 billion at the end of February.