TAIPEI, Jan 7 (Reuters) – Taiwan is considering banning foreign funds from buying bonds, a local newspaper reported on Thursday, as regulators and the central bank ratchet up pressure on currency speculation they fear could damage the economy.
The move was aimed at stopping foreign investors from using the bond market to speculate on the Taiwan dollar, the Chinese-language Commercial Times reported on Thursday, citing a central bank official.
“The central bank does not welcome that,” Spencer Lin, head of the central bank’s foreign exchange bureau, was quoted as saying, when asked if foreign funds could invest in bonds.
Officials from both the Financial Supervisory Commission and Taiwan’s central bank said they had no knowledge of any such talks, and were checking the newspaper report.
Taiwan has imposed a series of capital controls and other measures since November in a bid to control flows of speculative “hot money” flooding into the island as investors bet that its currency will appreciate.