TAIPEI (Reuters) – Taiwan’s central bank said on Sunday it had banned Deutsche Bank from trading deliveries and deliveries in Taiwan dollars and suspended it for two years from trading derivatives in a crackdown on speculation.
The Taiwan dollar is at a 23-year high against the US dollar, as the island’s trade-dependent economy grows on global demand for its technology products while people work from home. The central bank was particularly concerned about a case in which it said foreign banks had helped grain companies engage in foreign exchange speculation through forward deliveries, affecting the stability of Taiwan’s foreign exchange market.
Sources told Reuters on Friday that the central bank sent letters describing the punishments to Deutsche Bank, CitigroupInc, ING and Australia and New Zealand Banking Group Ltd (ANZ) for their involvement.
In addition to the penalty for Deutsche Bank’s Taipei branch, the central bank said in a statement that the ING and ANZ offices in Taipei will not be allowed to trade in non-relevant Taiwanese dollar deliveries before nine months.
The Citi office in Taipei has reportedly been suspended from pre-trading the delivery of the Taiwan dollar 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 sentences will take effect on Monday, the central bank added.
Eugene Tsai, head of the central bank’s foreign exchange department, told Reuters that the transactions carried out by the banks in accordance with the rules before Friday were completed on time.
He added that the punishment against Deutsche meant that he would not be able to trade foreign exchange or swap options.
The central bank announced its investigation into the case last month, which it said involved eight grain trading companies.
Reporting by Liang-sa Loh and Ben Blanchard; Editing by Christian Schmollinger and Kim Coghill